India moves to ban cryptocurrencies, roll out own digital currency
India will ban all cryptocurrencies and instead have a sovereign digital currency if a bill moved in the Lok Sabha on January 29 eventually gets the Parliament's nod.
The bill prohibits all private cryptocurrencies in India. However, it would allow certain exceptions to promote the underlying technology of cryptocurrency and its uses.
India has had strained relations with cryptocurrencies. The digital currency's rising popularity caught the Reserve Bank of India's attention in 2018.
Citing concerns like terror financing, money laundering and other outlawed activities, the RBI decided to ban the use of banking channels to buy or sell cryptocurrencies.
Now, through a bill titled 'The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021', the 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 operationalize it.
Taking exception to Bill's provisions, Nishchal Shetty, the founder of cryptocurrency WazirX took to Twitter to say: "There are millions of Indians who own crypto assets. Billions of dollars of people's money and wealth is at stake here. I am sure the Government understands that. The good part is that RBI wants to create its own CBDC. Yay to that. The scary part is about “banning private cryptocurrency with some exceptions."
An earlier version of this Bill in 2019 had reportedly sought to ban cryptocurrency and criminalise its possession in India. However, it was not introduced in Parliament.
There has been a surge in the number of cryptocurrency investors and in trading volumes in India over the last year.
The detailed text of the bill has not yet been made public.