The Govt Of India is set to table the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the coming winter session of Parliament. The bill seeks to prohibit all private cryptos with a few exceptions and aims to create a framework that would facilitate the creation of a CBDC - central bank digital currency.
It is highly unlikely that cryptocurrency will be allowed as a legal tender in India. Crypto trading might continue as long as investors buy and trade through crypto exchanges that meet certain conditions.
The said bill is among 26 items of legislation for consideration in the winter session of parliament, according to the Indian parliament’s official website. The document doesn’t provide any clarity on the exceptions. It confirms that the government plans to promote the official digital currency which will be issued by the RBI-Reserve Bank of India. The central bank has already shown the intent of launching its own crypto but is yet to announce one.
Well, the government had earlier listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, for the budget session but deferred it for wider consultations. Though the measure seems to be essentially the same as the draft bill submitted in January, it can't be said whether the two are identical as the latest draft is not yet publicly available.
Recently, PM Narendra Modi chaired a high-level meeting on cryptocurrencies with RBI, finance ministry, and Sebi. Expectations had grown that the government had potentially soothed its view on crypto and would perhaps allow cryptocurrencies regulated as assets instead of a means of payment.
"It is important that all democratic nations work on cryptocurrency and ensure that it does not end up in wrong hands, which can spoil our youth," Modi had said at The Sydney Dialogue last week.
According to a report from India Today, crypto trading might continue under the proposed bill as long as investors buy from crypto exchanges that meet certain conditions. The bill will be more about restricting who is allowed to make or issue new cryptocurrencies to protect investors.
Bitcoin dropped more than 13% on WazirX, while dogecoin and shiba inu dropped more than 15% in the hours after the bill announcement.
