It should be noted that on March 4, 2021, the Supreme Court overturned an RBI circular dated April 6, 2018, barring banks and organisations regulated by it from providing virtual currency services.
In the coming winter session of Parliament, the Indian government is expected to introduce legislation banning all but a few private cryptocurrencies and creating a framework to control digital currency issued by the RBI.
It should be noted that on March 4, 2021, the Supreme Court overturned an RBI circular dated April 6, 2018, barring banks and organisations regulated by it from providing virtual currency services.
Here are 10 points on Cryptocurrency Ban in India:
- The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is slated to be introduced in the Lok Sabha during the winter session, which starts on November 29.
- The bill aims to "provide a conducive framework for the development of the Reserve Bank of India's official digital currency."
- It also aims to outlaw all private cryptocurrencies in India, with some exceptions to encourage cryptocurrency's underlying technology and applications."
- There is currently no rule or prohibition in place in the country regarding the usage of cryptocurrencies.
- In light of this, Prime Minister Narendra Modi met with senior officials earlier this month to discuss cryptocurrencies, and there are signs that tough regulatory measures may be enacted to address the issue.
- In recent times, there has been an increase in the number of advertising, some starring even movie stars, promising easy and large returns on investments in cryptocurrencies, amid fears that such currencies are being exploited to deceive investors with false claims.
- The Standing Committee on Finance, chaired by BJP member Jayant Sinha, met with officials from crypto exchanges, blockchain, and the Crypto Assets Council (BACC) last week and came to the conclusion that cryptocurrencies should not be prohibited, but rather regulated.
- The Reserve Bank of India has consistently stated its opposition to cryptocurrencies, claiming that they represent severe challenges to the country's macroeconomic and financial stability, and that the number of people trading on them and their reported market value are both suspect.
- Earlier this month, RBI Governor Shaktikanta Das repeated his opposition to cryptocurrencies, claiming that they pose a severe threat to any financial system because they are uncontrolled by central banks. The RBI revealed its intention to create an official digital currency in response to the rise of cryptocurrencies such as Bitcoin, which the central bank has expressed worry about.
- In the last decade or so, private digital currencies/virtual currencies/cryptocurrencies have grown in popularity. Regulators and governments have been sceptical of digital currencies and concerned about the risks they entail.
