The Indian government’s bill proposes to “ban all private cryptocurrencies”.
The proposed law introduces the regulatory framework for the creation of a central bank digital currency (CBDC).
The Indian government has proposed a plan to „ban all private cryptocurrencies“ and introduce a central bank digital currency (CBDC).
Cryptocurrency holders in India were caught off guard and left in confusion after the announcement on Friday, January 29 that the country’s parliament would consider a government-backed bill that would ban privately-sourced cryptocurrency. Since the ruling party controls both houses of parliament, the chances of this bill passing are relatively high.
Bill 2021 aims to ban cryptocurrencies in India and provide a framework for the creation of an official digital currency that would be issued by the Reserve Bank of India (RBI).
According to observers, the definition of the term „private“ given by the government could imply that any non-sovereign cryptocurrency could be considered as a currency to be banned such as Bitcoin (BTC).
Nischal Shetty, CEO of WazirX, a Mumbai-based cryptocurrency exchange:
A country as large as India should at least make an effort to understand the underlying terminologies before bringing tech-related bills to parliament – it seems like a rushed step.
India, a long history
A few years ago, India had already considered banning cryptocurrency. In April 2018, the Reserve Bank of India banned banks from doing business with companies doing business in cryptocurrency. However, the Indian Supreme Court overturned this decision in March 2020.
In addition, the old bill dating from June 2020 was more severe than that of 2021. Indeed, the government had proposed a 10-year prison sentence for cryptocurrency traders. The new 2021 bill does not mention a prison sentence.
And maybe there is some hope in the muddled language of the bill. The text mentions „certain exceptions“ to the ban in order to promote the technology.
But could this exception just be a CBDC?