The Indian government will consider a bill to introduce a digital rupee next week and ban specific cryptocurrencies.
The bill proposes to ban “private cryptocurrencies”
The bulletin released on Tuesday lists “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” for introduction, consideration, and passing. The document says lawmakers could vote on a bill that provides a facilitative framework for creating the official digital currency issued by the country’s central bank, the Reserve Bank of India. In addition, the bill proposes to ban “private cryptocurrencies,” excluding assets, “to promote the underlying technology of cryptocurrency and its uses.”
In March 2020, the Supreme Court of India overturned a blanket ban on cryptocurrencies imposed by the central bank. The same bill was previously on the agenda of India’s parliament but did not result in the government voting on a law to deal with digital assets. Since then, statements by officials have indicated that the Indian government is considering various solutions to regulate digital assets.
A ban on token projects would impact the crypto industry
No official data is available, but industry estimates suggest that there are currently 15-20 million crypto investors in India. Therefore, the Indian government’s decision to create a concrete legal framework for a central bank digital currency and ban many token projects is likely to make big waves across the industry. Earlier this month, Indian Prime Minister Narendra Modi said that all democratic nations must work together to ensure that cryptocurrencies “do not end up in wrong hands, which can spoil our youth.”
A September report from ET Now also suggests that the country’s tax authority could tax crypto income through trading and exchanges. In addition, officials at India’s finance ministry are reportedly considering a legal framework to treat cryptocurrencies closer to commodities than currencies.