Crypto Bill: India Wants to Block Most Cryptocurrencies

The government said late on Tuesday that India wants to ban most private cryptocurrencies while introducing a new bill to regulate virtual currencies in the winter session of Parliament.

According to the legislative agenda for the winter session that begins later this month, the government will only allow certain cryptocurrencies to promote the underlying technology and its use.

Through the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, India is also looking to create a framework for official digital currency which will be issued by the Reserve Bank of India.

The central bank has expressed “serious concerns” about private cryptocurrencies and is set to launch its own digital currency by December.

Bitcoin, the world’s largest cryptocurrency, is hovering around $60,000 (about Rs 44.7 lakh), and has more than doubled in value since the beginning of this year, attracting crowds of local investors. Bitcoin price in India is Rs. 35.04 lakhs on November 24 at 9 am IST.

There is no official data available, but industry estimates suggest that there are 15 million to 20 million crypto investors in India with total crypto holdings of around Rs. 40,000 crores.

Earlier this year, the Indian government considered criminalizing the possession, issuance, mining, trading and transfer of crypto assets, but a bill was not introduced.

Since then, the government has changed its stance slightly and is now looking to discourage trading in cryptocurrencies by imposing heavy capital gains and other taxes, two sources told Reuters this month.

But a senior government official told Reuters the plan is to ban private crypto assets, while eventually paving the way for a new central bank digital currency (CBDC).

Sources separately told Reuters that Prime Minister Narendra Modi chaired a meeting to discuss the future of cryptocurrencies amid concerns that unregulated crypto markets could become avenues for money laundering and terror financing.

© Thomson Reuters 2021


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