India Banning Cryptocurrencies? Also Creating Central Bank Digital Currency (CBDC).
Indian government's drafted legislation proposing to “ban all private cryptocurrencies" in Budget Session 2021, the bill also mentions the government's central bank digital currency (CBDC) plan. the proposal is pending Parliament's approval by April 8.
In session Budget 2021, India plans to introduce a bill to ban the all cryptocurrencies in India. However this is not the first time the government of India has tried to act against VCs.
It started in December 2013 when RBI first warned the users about virtual currencies saying their value is a matter of speculation and not underpinned by an asset or good. On April 6, 2018, RBI issued a circular to banks from dealing with crypto-firms and virtual currencies.
Again on February 28, 2019, the Finance Ministry committee suggested ban on VCs and to create digital rupee also called central bank digital currency (CBDC). The bill also included any crypto activity in the country, punishable with fine or imprisonment or both. However, it was not by the Parliament.
In Budget session 2021 the government introduced the Cryptocurrency and Regulation of Official Digital Currency Bill. The bill will impose a ban on crypto-currencies like Bitcoin and other popular crypto-currencies trading, mining and investments in the country. It also suggests bringing a digital version of Indian Rupee and "was exploring the possibility as to whether there was a need for a digital version of fiat currency and in case there was then how to operationalise it.”
A bill has already been proposed and on Tuesday, Finance Minister Nirmala Sitharaman clarified government’s stance against crypto-currency in the Rajya Sabha, “A high-level Inter-Ministerial Committee (IMC) constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose specific actions to be taken in the matter recommended in its report that all private cryptocurrencies, except any virtual currencies issued by state, will be prohibited in India.”
The proposal is pending Parliament’s approval by April 8 and will be debated till then.