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The Budget session of the Parliament will consider a bill that prohibits all private cryptocurrencies and provides for an official digital currency to be issued by the Reserve Bank of India. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is slated for introduction, consideration and passing.
But, certain exceptions will be permitted "to promote the underlying technology of crytptocurrency and its uses," the Lok Sabha Bulletin said.
In 2018, the RBI had effectively banned crypto transactions after a line of frauds in the months following demonetisation. The RBI 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.
In March 2020, the Supreme Court set aside the Reserve Bank of India’s 2018 circular. Since then, cyrptocurrency exchanges have been operating in a regulatory vacuum.
The recent price surge of Bitcoin has brought back interest in cryptocurrency trading in India. Top banks, who have stopped cryptocurrency exchanges after the RBI’s order, have restarted transactions. However, reports of frauds have also risen, highlighting the risks that exist in an unregulated cryptocurrency ecosystem.
Source: bloombergquint.com
Written by Siddhant Sharma
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