Cryptocurrency Bill: All eyes at the moment are set on India’s cryptocurrency regulation Bill that is likely to feature in the ongoing Parliament Winter Session this year. Over the past few weeks, a lot of deliberations and discussions have taken place regarding India’s move on cryptocurrencies, which are still unregulated in the country. According to a recent report by the Economic Times, Prime Minister Narendra Modi will take a final call on the regulatory framework of the Bill as stakeholders have found themselves in conflict regarding the same. The long deliberations, discussions and the government’s probable move to bring changes in the regulatory framework has delayed the tabling of the Bill in the Parliament.
“We must … jointly shape global norms for emerging technologies like social media and cryptocurrencies so that they are used to empower democracy, not to undermine it,” PM Modi said on Friday, amid ongoing discussions regarding the regulation of cryptocurrency. The government, before the beginning of the winter session, had notified the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, days after a meeting of the Cabinet and representatives of the Reserve Bank of India.
Here is what we know so far about the central government’s stance on cryptocurrency regulation in India:
– PM Modi’s intervention to take the final call comes after a meeting held on Thursday among stakeholders, including the RBI who has repeatedly flagged concerns about unregulated cryptocurrencies in India. According to the ET report which quoted sources, the possible options for the Bill “include a complete ban on private cryptocurrencies, a partial ban, allowing all categories of crypto products with regulation, or just a select few with regulations”.
– Another report by ET also suggested that the government may be considering restrictions on exchange-to-exchange transfers. As per the report quoting sources, a blanket ban on trade bourses is expected, and wallets and Google Chrome extensions that mask the traders’ identities will also be restricted. The government may also open a wallet of its own to keep eye on transactions.
– Cryptocurrency exchanges will also have provide quarterly disclosures to the government to maintain transparency, the report noted. As per sources quoted by ET, the government is thinking of implementing a system aimed to monitor all inflow and outflow of the Indian rupee on Indian crypto exchanges. Only those exchanges will be allowed to run in the country which may open their ledgers for the government on a quarterly basis.
– India is also mulling to appoint is capital market regulators to oversee crypto transactions, sources told ET. The report says that the central government is expected to give a deadline to crypto holders to declare their assets to comply with the new rules. Any violator of the rule may be fined as much as 200 million rupees or face a jail term up to 1.5 years, according to the sources. The Bill might also refer cryptocurrencies as ‘cryptoassets’, and will not refer to the RBI’s plan of launching a central bank digital currency.
– Finance minister Nirmala Sitharaman earlier this month said that the government has reworked the bill that proposed to ban all cryptocurrencies, but has no plans to consider Bitcoin as an official currency in the country. She also discouraged any speculation about the upcoming bill, calling it unhealthy. She confirmed that the government will prepare a well-consulted Bill before introducing it to the Parliament.