The Bitcoin Bill, which just missed being introduced in Parliament’s Budget Session earlier this year, is apparently ready for debate during the next Monsoon session. Although the government has discussed banning all cryptocurrencies in India, millions of Indians continue to trade in digital commodities. Even though the government has stated that it would create its own digital currency, investors remain concerned about its destiny. Nirmala Sitharaman, the finance minister, has stated that her team has done the legwork on the Bill and has collected the views of all stakeholders.
The Cabinet note is ready, she told all that is left is to see “when the Cabinet can take it up and consider it so that we can move it.” The Bill’s main objective was defined as the “creation of the official digital currency to be issued by the Reserve Bank of India” in a bulletin produced by the Lok Sabha Secretariat for the Budget Session. The Bill further said that it “seeks to prohibit all private cryptocurrencies in India,” but that “certain exceptions to promote the underlying technology of cryptocurrency and its uses” would be allowed.
It was reported at the Budget Session that the Bill would be “one of the world’s strictest policies against cryptocurrencies (and) would criminalise possession, issuance, mining, trading, and transferring crypto-assets,” citing an unidentified government source. According to the report, investors would be given a window to sell their crypto assets in such a case, after which penalties would be imposed.
However, investors took heart from the Finance Minister’s remarks that the government was “looking at ways in which experiments can happen in the digital world and cryptocurrency,” according to the same report. She told CNBC-TV18, “I can only give you this clue that we are not closing our minds,” adding that “there will be a very calibrated position taken” on cryptocurrencies. The Union finance ministry cited a Reserve Bank of India (RBI) circular from April 2018 that “advised all the entities regulated by it not to deal in” virtual currencies in response to a question in Parliament during the last Budget session on whether there was a ban on “bitcoin trading in the country.” However, it was observed that the RBI circular was overturned by the Supreme Court in a 2020 ruling. As a result, Indian investors have been permitted to participate in bitcoin trading.
Following the Supreme Court’s decision, some private and public banks are said to have continued to discourage their clients from trading in cryptocurrencies, citing the original RBI circular. As a result, the central bank clarified last month that banks cannot use the circular to refuse services for digital currencies.
“In view of the Hon’ble Supreme Court’s order, the circular is no longer valid from the date of the Supreme Court’s judgement, and therefore cannot be cited or quoted from,” RBI stated.
Last year, the RBI stated that it was “very much in the game” to develop its own digital currency, with reports claiming that it was concentrating on the distributed ledger technology that underpins cryptocurrencies.