Centre announces bill to ban cryptocurrencies before Parliament's Winter Session
The central government will table a bill to ban cryptocurrencies in the upcoming Winter Session of Parliament. The Centre released a legislative agenda for the upcoming session on Tuesday. As many as 26 bills will be introduced in Parliament during the Winter Session. The bill seeks to allow certain exceptions and provide a framework for an official digital currency, the agenda document stated.
Why does it matter?
- India had long been mulling a ban on private cryptocurrencies, which is expected to hurt the crypto sector hard.
- India likely has the world's largest number of cryptocurrency investors with over Rs. 6 lakh crore invested, industry experts say.
- Thus far, the crypto market has been unregulated.
- Earlier, the Reserve Bank of India (RBI) had expressed concerns over money laundering and terror financing.
What does the bill say?
The bill is called The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, according to the agenda document. Apart from restricting cryptocurrencies, the bill seeks "to create a facilitative framework for the creation of the official digital currency" by the RBI. Separately, the Winter Session will also consider the banking amendment bill, the IBC amendment bill, and the farm law repeal.
PM Modi recently held a meeting on this
Last week, a parliamentary panel discussion on cryptocurrencies had called for regulation as opposed to a complete ban. Days before the panel met, Prime Minister Narendra Modi had held a high-level meeting on the subject. At the meeting, it was reportedly discussed that the government was considering a "progressive and forward-looking" approach to crypto, but also a prohibition.
Crypto can spoil youth in wrong hands: Modi
At the meeting, concerns over money laundering and terror financing were also raised. In a public address last week, PM Modi had cautioned the world's democracies against cryptocurrencies. He had said that cryptocurrencies in the wrong hands can spoil the youth.
RBI had earlier banned cryptocurrencies
Earlier, the RBI had instituted a complete cryptocurrency ban, which was reversed by the Supreme Court in March 2020. The apex bank has been in the process of coming up with its own digital currency. A timeline for the same is yet unknown. It had earlier said that currencies are a sovereign right and shall not be assigned to any individual entity.