Indian govt. today introduced much awaited cryptocurrency and regulation of official digital currency bill 2021 to facilitate a framework to create an official digital currency to be issued by Reserve Bank of India (RBI). The bill also seeks to ban all sorts of private cryptocurrencies and allow only the ones that are required for promotion of underlying technology.
India Takes Next Step Towards Crypto Adoption
Regulation of cryptocurrency in India has been a subject of debate with RBI taking strict actions many times including restriction to purchase cryptocurrencies through bank accounts. But, with passing time Bitcoin and cryptocurrencies have taken a huge leap in terms of institutional adoption especially in 2020-21.
The Indian house of parliament today introduced a bill titled, “The cryptocurrency and Regulation of Official Digital Currency Bill, 2021” and it will be discussed in Lok Sabha house of Indian parliament. The bill primarily focusses on creation of official digital currency and prohibit all other private cryptocurrency except the ones required for promotion of Blockchain technology.
It is clear from the purport of bill that apart from official digital currency only primary public cryptocurrencies like Bitcoin might be allowed to operate in India while all other ICO based as well cryptocurrencies owned by private firms like XRP, IOTA etc. might not find a place in India.
Is the Bill Positive or Negative for Indian Cryptocurrency Holders?
In March, 2020 Supreme Court of India lifted the ban on banking services for crypto services thus indicating the positive instance of judiciary towards booming crypto sector in India. Though history tells RBI has always taken a strict stance from beginning towards crypto.
Recently Coingape reported that RBI is exploring need for cryptocurrency in payment sector and the introduction of this bill clearly indicated that cryptocurrency is “Official digital currency”.
Clearly, the initial ICO scams and many crypto related frauds have led the committee to prohibit private cryptocurrency. Publicly decentralized cryptocurrencies like Bitcoin, Ethereum etc. due to their scale of adoption will not be that easy to prohibit and regulation might be the preferred step.
In short, bill seems to be positive for major public cryptocurrencies like Bitcoin and will seek to regulate them instead of ban but this bill closes doors for many widely popular private cryptocurrencies.