In the legislative order of business for the budget session of seventeenth Lok Sabha that began today, the Government has listed a bill providing for the banning of all private cryptocurrencies like bitcoin in India, ether, ripple and others.
The bill also provides for the creation of a legislative framework on an official digital currency. A Reserve bank of India booklet on payment systems issued on 25th Jan also showed that the central bank is exploring whether to issue a digital version of the rupee.
“Private digital currencies have gained popularity in recent years," the central bank booklet said. “In India, the regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks. Nevertheless, RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and, in case there is, how to operationalize it," it noted.
The RBI had in 2018 effectively banned crypto transactions and had asked all regulated entities, such as banks, to stop any dealings related to private cryptocurrencies as part of that order. This brought cryptocurrency trading in India to a halt.
A previous RBI ban on the use of bank channels for payments associated with cryptocurrency issued in 2018 was overturned by the Supreme Court in March 2020 creating a vacuum in the regulation of cryptocurrency in India.
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