Titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’, it is one of the list of new bills to be introduced, considered and passed.
“To create a facilitating framework for the creation of an official digital currency to be issued by the Reserve Bank of India,” said a bulletin listing the legislative business, posted on the Lok Sabha’s website.
The winter session of Parliament is starting from November 29.
“The bill also seeks to ban all private cryptocurrencies in India, however, it allows certain exceptions to promote the cryptocurrency and the technology underlying its use,” the bulletin said.
The RBI is examining the feasibility of launching its own central bank digital currency, but has yet to decide on a possible date for launching a pilot project.
However, the Lok Sabha Bulletin did not give any other details regarding cryptocurrency and regulation of the Official Digital Currency Bill, 2021.
Earlier this month, a high-level meeting convened by Prime Minister Narendra Modi conducted a comprehensive review of cryptocurrencies and the way forward.
Government sources said it was looking at “forward-looking and progressive” regulation of cryptocurrencies and made it clear that an unregulated market for the digital currency should not become an opportunity for money laundering and terror financing. can be given.
There was a strong opinion during the meeting that there was an attempt to mislead the youth through non-transparent advertisement which needed to be stopped, sources had told.
Soon after this meeting, Parliament’s Standing Committee on Finance met to take views from various industry participants.
Suggesting that the ban may not help, industry representatives told the Parliamentary Standing Committee that cryptocurrencies should be regulated because they cannot be stopped, amid concerns over security and investor protection by some panel members.
Addressing an event last week, PM Modi urged cooperation among the democracies of the world to ensure that cryptocurrencies like bitcoin “do not fall into the wrong hands”.
While the government and RBI have been discussing legislation on the issue for several months, there has been a sharp increase in interest in cryptocurrencies with many individuals, including senior citizens, investing in private digital currencies.
India is estimated to have the largest number of cryptocurrency investors in the world, although the value of investments may be lower than in Western countries.
The Reserve Bank has consistently maintained the need to ban private digital currency.
Earlier this year, the RBI had conveyed its decision to ban such instruments after expressing serious concerns.
Stating that the technology of blockchain should be encouraged, the central bank questioned the purpose of cryptocurrencies being labeled as currency. It had said that currency is a sovereign right and cannot be assigned to any individual entity.
Apart from their impact on the economy, there are also concerns about the volatility in their prices.
The central bank has also raised the security risks associated with cryptocurrencies, saying it could lead to money laundering and terror financing due to the anonymity of transactions.
The RBI has also pointed to threats to macroeconomic management if these instruments are allowed as they would pose a “serious risk” to the country’s financial system.
In 2019, the government appointed an inter-ministerial panel headed by the then Economic Affairs Secretary Subhash Chandra Garg, which favored a ban on private cryptocurrencies.
The issue has been intensely discussed since then, while the region has strongly lobbied for a complete ban to be stopped.
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