Centre likely to introduce bill to ban private cryptocurrencies, create official digital currency

For those interested in cryptocurrencies, the government of India has listed a bill to be introduced in the Parliament during the Budget session of the 17th Lok Sabha. The bill seeks to ban private cryptocurrencies like Bitcoin, Ripple, Ether, and others in India. 

The government is likely to table the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. It is aimed at creating a ‘facilitative framework’ for an official digital currency in India to be issued by the banking regulator, the Reserve Bank of India (RBI). The government’s bill also seeks to ban the Bitcoin, Ether, Ripple, and other private cryptocurrencies but it may allow certain kinds of uses and promotions of the technology behind them.

According to the RBI booklet on payment systems, the government is sceptical of these currencies and RBI is exploring the creation of a digital version of the Indian national currency.

“In India, the regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks. Nevertheless, RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and, in case there is, how to operationalise it,” the booklet said while acknowledging how private digital currencies have gained popularity recently.

These private cryptocurrencies were banned earlier as well, but the Supreme Court later overturned the previous ban in 2018.

It is to be noted that the government is considering the introduction of a bill to set up a development finance institution (DFI) in India as well. The central government will introduce The National Bank for Financing Infrastructure and Development (NaBFID) Bill, 2021 in the Parliament.

According to media reports, the DFI is going to act as a catalyst and promote infrastructural financing. It will be the principal financial institution and development bank in India to provide a supportive ecosystem for the infrastructure projects in the country across their life-cycle.

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