India's Crypto Bill: New cryptocurrency Bill Proposes To Ban Private Players

The Indian government has added another crypto bill to the forthcoming winter session of parliament, titled "The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021." The measure proposes to prohibit all private cryptocurrencies, with a few exceptions.

Before being submitted in parliament, the bill needs to be approved by the cabinet.

The crypto law, which intends to govern digital currencies, will be submitted in Parliament during the upcoming winter session, which begins on November 29. According to a government statement released on Tuesday, the bill is one of 26 that have been scheduled for the introduction.

The first-ever Parliamentary panel discussion on cryptocurrencies was held last week, with the conclusion that cryptocurrency cannot be banned in India, but must be regulated.

On November 16, the BJP's Jayant Sinha presided over a meeting of the standing committee on finance, which included members from crypto exchanges, the Blockchain and Crypto Assets Council (BACC), industry organisations, and other stakeholders.

On the subject, Prime Minister Narendra Modi convened a high-level conference with officials from various ministries and the Reserve Bank of India (RBI). PM Modi urged democratic nations to work together to regulate private virtual currencies, warning that they could end up in the "wrong hands" if they are not regulated.

PM Modi said it was critical to guarantee that digital currencies were not utilised in an illegal manner in a speech delivered at the Sydney Dialogue last Thursday.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, aims to do the following, according to the bill description:

"To create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses."

Shivam Thakral, CEO of BuyUcoin, said, "We are highly optimistic about the introduction of the crypto bill in the upcoming session of the parliament. We expect the bill to accommodate the aspirations of Indian crypto owners, Indian crypto entrepreneurs, and investors who have put their faith in India's crypto growth story.

The crypto bill should be flexible enough for young blockchain projects to flourish and we strongly believe that there is a very strong case for a standard process for new cryptocurrencies before they get listed on any exchange in India for trading. I think popular crypto-assets like bitcoin, Ethereum will be pre-approved by the regulators for getting listed on the exchange. We also request the government to give immediate clarity on the taxation and filing of crypto assets."

The bill will also pave the door for a central bank digital currency (CBDC) initiative, also known as a fiat cryptocurrency project. The initiative has already been started by the RBI. However, in the worldwide race of fiat cryptocurrencies, it is far behind. The current Bill appears to be in line with the RBI's position.

Jay Hao, CEO of cryptocurrency exchange OKEx.com, said, "We urge the government to take a nuanced approach towards regulating crypto assets in India. With the positive outcome of the cryptocurrency bill, India will embark on an exciting journey of becoming the global leader in crypto, Defi, and NFTs. India is home to the highest number of crypto owners in the world and the onus lies on the government to protect the interest of a large number of crypto investors in the country. I strongly believe that the global crypto community will be watching closely, the developments around India's crypto bill".

For many years, the Reserve Bank of India has issued numerous warnings. Shaktikanta Das recently stated that these cryptocurrencies pose a severe danger to the country's macroeconomic and financial stability. Das also slashed the number of investors who trade on them, as well as the average transaction amount.