- by Stocktry Expert
- 30th Jan 2021
Cryptocurrency to be Banned in Budget Session
The Government has decided to introduce a bill for banning private cryptocurrencies during this Budget session. On the second note, the Banning cryptocurrencies bill is among 20 new bills that the Government intends to introduce.
The move is likely to end ambiguity on cryptocurrency, which is neither banned nor legalized in India. The Reserve Bank of India had prohibited banks from dealing with crypto exchanges, but that restraint was overturned in March 2020 by India's Supreme Court.
A Lok Sabha bulletin has said that the Regulation of Official Digital Currency Bill, 2021 is likely to be introduced in the Budget Session of the Parliament.
"The bill also seeks to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses," CNBC TV18 quoted.
If the bill is passed, it will prohibit the use of cryptocurrency as legal tender and currency. Also, cryptocurrency will be kept out of the payments system.
Earlier, released on January 25, an RBI booklet on payment systems stated that the central bank is exploring whether to issue a rupee's digital version.
"Private digital currencies (PDCs)/virtual currencies (VCs)/ cryptocurrencies (CCs) have gained popularity in recent years. In India, the regulators and governments have been skeptical about these currencies and are apprehensive about the associated risks," said the booklet titled 'Payment and Settlement Systems in India.'
"Nevertheless, the RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalize it," it added.
The value of all cryptocurrencies earlier this year surpassed the $1 trillion mark, and Bitcoin crossed the $40,000 mark.