The Indian government is all set to launch a bill to ban all private cryptocurrencies and to create a framework for an official digital currency which is to be issued by the Reserve Bank of India (RBI) during Parliament’s Winter Session which is starting on 29th November.
A Lok Sabha bulletin which was released on Tuesday stated that The Cryptocurrency & Regulation of Official Digital Currency Bill, 2021 which will “allow for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”
RBI stated in July that it was working towards making its own digital currency and the Central Bank Digital Currency (CBDC).
“A CBDC is the legal tender issued by a central bank in a digital form. It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency. CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies that have mushroomed over the last decade. Private virtual currencies sit at substantial odds to the historical concept of money,” stated by T Rabi Sankar who is the RBI deputy governor.
India has seen good interest among investors to invest in cryptocurrency and also several other investors already are making investments which continue to warm the people of the country against putting their money on cryptocurrencies which is of high financial risks.
A meeting was chaired by Narendra Modi, Prime Minister earlier this month to discuss the future of cryptocurrency and warned as well against cryptocurrency falling in the wrong hands. The Centre also stated that it is now planning certain new changes in the laws regarding income tax in a bid to bring out cryptocurrency gains under the radar of tax and also to present them during the Union Budget in the upcoming year.
The RBI has highlighted on several occasions that it solely feels cryptocurrencies like Ethereum, BitCoin, and Dogecoin among many others has risk to financial stability and also questioned its claims of value in the market while questioning the investors to not get “lured” by the promises made of returns on cryptocurrencies.
However, the Supreme Court voided the RBI circular banning cryptocurrencies in 2020 and also setting aside an RBI circular of 6th April, 2018 to prohibit banks and entities by it from providing any sort of services with relation to virtual currencies in March this year.