The central bank is also considering issuing a digital version of the rupee, according to an RBI booklet on payment systems released on January 25, 2021.
The Government has classified a bill providing for the banning of all private cryptocurrencies in India, such as bitcoin, ether, ripple, and others, in the legislative order of business for the 17th Lok Sabha’s budget session, which began today. The bill also establishes a legal structure for the development of an official digital currency. The central bank is also considering issuing a digital version of the rupee, according to an RBI booklet on payment systems released on January 25th.
“In recent years, private digital currencies have grown in popularity,” according to the central bank booklet. “Regulators and governments in India have been sceptical of these currencies and are concerned about the risks associated with them. Nonetheless, the RBI is looking into whether a digital version of fiat currency is required and, if so, how to make it operational, according to the statement. A previous RBI ban on the use of bank networks for cryptocurrency payments, which was enacted in 2018, was overturned by the Supreme Court in March 2020, leaving a regulatory void in India.
An earlier government bill on cryptocurrency that was introduced in 2019 allegedly tried to outlaw cryptocurrency and make its possession illegal in India. It was not, however, adopted in Parliament. Certain exceptions to support the underlying technology of cryptocurrency and its uses will be permitted, according to a summary of the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the order of business. The number of cryptocurrency investors and trading volumes in India have increased dramatically over the last year. CoinDCX and Coinswitch Kuber, two cryptocurrency exchanges, have also secured early-stage funding for their operations. The bill may put an end to the country’s fledgling cryptocurrency industry. So far, the bill’s comprehensive text has not been made available to the public.