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India Proposes Law To Ban Cryptocurrencies

Since India’s Supreme Court reached a historic judgment in early March last year that effectively removed a two-year ban on cryptocurrency transactions, the country has seen a host of homegrown and international cryptocurrency companies revive or launch from scratch after a long hibernation era. But lately Indian government proposes law to ban cryptocurrencies.

Indian government on January 29, 2021 tabled a bill, when enacted, would restrict or potentially prohibit cryptocurrencies. In the agenda released on the website of the lower house (2021), the law aims to “prohibit all private cryptocurrencies in India” but to “allow certain exceptions to promote the underlying [blockchain] technology of cryptocurrency and its use.” As per CNBC, the federal government would promote blockchain, the technology behind cryptocurrencies, but is not keen on cryptocurrency trade.

The legislation also aims to “create a framework for facilitating the creation of an official digital currency” to be issued by the National Central Bank, Reserve Bank of India, according to the agenda.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 says “To create a facilitative framework for 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”.

This is not the first time that Indian policymakers have taken such a hard stand on cryptocurrencies. In 2018, the Indian government commission recommended a moratorium on all private cryptocurrencies and suggested a prison sentence of up to 10 years for offenders.

Many countries have pursued the creation of their own national digital currencies. However, there are substantial variations amongst digital national currencies and private cryptocurrencies, such as bitcoin. Cryptocurrencies such as bitcoin are decentralized, whereas digital national currencies are usually centralized.

 

 

 

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Sources

http://loksabhadocs.nic.in/bull2mk/2021/29012021.pdf

www.bloomberg.com/news/articles/2021-01-30/india-plans-to-introduce-legislation-to-ban-cryptocurrencies

www.cnbc.com/2021/01/30/the-indian-government-may-ban-cryptocurrencies-like-bitcoin.html

techcrunch.com/2021/01/30/india-plans-to-introduce-law-to-ban-bitcoin-other-private-cryptocurrencies/?

fyggex.com/2020/09/21/india-plans-to-ban-cryptos-what-happens-to-growth-emerging-billionaires/