Clearing all the doubts and panic among investors regarding the upcoming cryptocurrency bill, finance minister Nirmala Sitharaman said on Tuesday that the government is working on a new bill to regulate cryptocurrency in India. While replying in Rajya Sabha, Sitharaman said, “There were other dimensions and the bill had to be reworked and now we are trying to work on a new Bill,” she added.
There were extensive discussion on the regulatory capacity of cryptocurrencies and “let’s wait for the bill,” she further added.
The Centre was likely to introduce the ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ during the Winter session of the Parliament. “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,” the bulletin in the Lok Sabha website mentioned. Following this news, the cryptocurrency holders had started panic selling in the Indian exchanges. Bitcoin, Ether and all other major cryptocurrencies slipped drastically in the Indian market last week. However, the cryptocoin prices were gradually recovered.
So, the description of Crypto Bill in the Lok Sabha website bulletin was an old one and the government is working to bring a new bill on cryptocurrency, finance minister clarified.
The central government has conducted a study through a research firm on “Virtual Currencies: An Analysis of the Legal Framework and Recommendations for Regulation’ in July 2017, the finance ministry said. In the same year, the central government has set up a high-level inter-ministerial committee under Subhash Garg, secretary, DEA to the issues related to virtual currencies. The committee submitted a detailed report in July 2019, suggesting “all private cryptocurrencies, except any cryptocurrency issued by the State, be banned in India”.
“The risk of cryptocurrency and it going in the wrong hands is being monitored,” the finance minister told Rajya Sabha on Tuesday.
Sitharaman said that the government is close to bringing the crypto bill in Parliament. It will be introduced after approval from the Cabinet. “This is a risky area and not in a complete regulatory framework. No decision was taken on banning its advertisements. Steps are taken to create awareness through RBI and SEBI. The Government will soon introduce a Bill, Sitharaman said on cryptocurrency during question hour in Rajya Sabha.
“Cryptocurrency needs to be regulated in India with a proper framework, rather than arbitrarily being banned. Crypto is a very different asset class since there is no underlying fundamental value besides demand and supply – much like any other collectible such as stamps or jewellery. Additionally, the digital rupee is a very welcome step, and will play a big role in driving India into the digital age of innovation, with multiple benefits over traditional physical currency,” Raja Gopalakrishnan, executive vice president – Global Real Time Payments, FIS said.
In a written reply to a query on CBDC, the finance ministry said, “Central Bank Digital Currency (CBDC) is introduced by a Central Bank. Government has received a proposal from Reserve Bank of India (RBI) in October, 2021 for amendment to the Reserve Bank of India Act, 1934 to enhance the scope of the definition of ‘bank note’ to include currency in digital form. RBI has been examining use cases and working out a phased implementation strategy for introduction of CBDC with little or no disruption.
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