Cryptocurrency bill may not be introduced in Parliament's Winter Session
The Centre may not introduce the cryptocurrency bill in this Winter Session of Parliament as planned as it is reportedly considering some changes. Instead of the bill, the government might consider bringing an ordinance or special order after the session, NDTV reported quoting sources. Reportedly, the Centre wants its cryptocurrency regulation to be in tandem with the global framework.
Why does it matter?
- The Centre has listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, among the 26 bills it will introduce during the ongoing Winter Session.
- Controversially, the bill seeks to ban the use of private cryptocurrencies with certain exceptions.
- It also seeks to create a framework for the creation of a new digital currency by the Reserve Bank of India (RBI).
More consultations on cryptocurrency bill likely
Reportedly, the government felt the need for wider consultation on the proposed bill and is likely to seek comments from the public. Discussions were also reportedly held on whether the Central Bank Digital Currency (CBDC)—to be introduced by the Reserve Bank of India—needs to be a part of the bill or should be dealt with under the RBI Act as it is a currency.
'Wait and watch' a better strategy: Official
After top-level discussions, it was felt any legislation on cryptocurrency must be in line with the global framework, an official told The Economic Times. "It might be a better strategy to wait and observe how this space evolves globally," the official said. In the meantime, the government may consider existing laws and regulations to ensure consumer protection and taxing cryptocurrency transactions, they added.
PM Modi called for global effort shape crypto norms
Prime Minister Narendra Modi Friday called for a united effort to shape global norms for social media and cryptocurrencies. He was speaking at the Summit for Democracy hosted by US President Joe Biden. This was necessary to ensure they were used to "empower" democracies and not to "undermine" them, Modi said. Modi had made a similar urge to regulate cryptocurrency at November's Sydney Dialogue.
What does India's cryptocurrency bill seek?
Through the bill, the Centre wants to regulate India's growing crypto market that has been unregulated so far. The bill reportedly defines cryptocurrency as an asset and bans its use as currency or payment. It also seeks to regulate crypto by the Securities and Exchange Board of India (SEBI) as a financial asset. Further, it seeks to create a digital currency by the RBI.
India had earlier banned cryptocurrencies
This is not India's first attempt to regulate the crypto market. In 2018, the RBI had directed financial institutions to break all ties with individuals and businesses dealing in cryptocurrency. But the direction was reversed by the Supreme Court in 2020 as it violated the freedom of trade guaranteed by India's Constitution. Since then, there have been talks to regulate the crypto market.