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Saturday, December 04 2021

India

India to table law banning cryptocurrencies, offer official digital currency

Image by VIN JD from Pixabay

Mumbai: India is looking to frame a law banning private cryptocurrencies like Bitcoin, and establish a framework to offer its own official digital currency, a legislative agenda listed by the government stated.

The agenda, published on the website of the lower house on Friday, states that the new law will “create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India (RBI)”.

It can be recalled that in 2019, a panel formed by the Union Government recommended a ban on all private cryptocurrencies and prescribed a jail term of up to 10 years and heavy fines if anyone is caught dealing in these digital currencies. It also urged the government to consider launching its own official digital currency through the RBI that will function like fiat money.

Before that, in 2018, the RBI had ordered all financial institutions to cut ties with any individual or business that deals with cryptocurrencies.

In March of 2020, however, the Supreme Court permitted banks to handle cryptocurrency transactions from exchanges and traders.

As of now, the legislation has been listed for debate in the ongoing Parliament session and, according to the agenda, aims to “prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses”.

The previous ban on digital currencies hit the cryptocurrency market hard. A similar situation can be expected if the law comes into effect.

(with inputs from Reuters)

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