The cryptocurrency bill to regulate digital currency in India is expected to be issued by the Union Cabinet soon. A high-level committee headed by the secretary had already submitted the report on cryptocurrency. The central government had earlier formed a panel to study the solution related to digital currencies and propose specific activities regarding crypto coins.
The legislation bill nearly missed out on being submitted during the Monsoon Session of the Parliament. The cryptocurrency bill’s key purpose will be the introduction of an official digital currency issued by the Reserve Bank of India. The bill also seeks to forbid all private cryptocurrencies in India but it would allow certain exceptions to promote the technology of cryptocurrency and its uses.
What Govt Says on Cryptocurrency
The finance minister of India said that a very calibrated step will be taken on digital currency as the world is moving rapidly with technology. There have been reports that some popular cryptocurrencies may be allowed as an asset in India.
However, the central government has not accepted cryptocurrency as a legal tender. The Centre has repeated that it does not consider cryptocurrencies as legal tender. During Budget 2018-19, the Union government had said that it will take all measures to eliminate the use of these crypto-assets in financial activities or as part of the payment system.
Reserve Bank of India on Cryptocurrency
In April 2018, the Reserve Bank of India had advised all the entities regulated by it not to deal in digital currencies. However, in 2020, the Supreme Court set aside the central bank’s 2018 bill and allowed banks and financial institutions to provide services related to cryptocurrencies. RBI announced in May 2021 that banks would be permitted to facilitate cryptocurrency trades after the Supreme Court ruling.
The RBI has concerns about the cryptocurrencies traded in the market and has conveyed the same to the government.
Crypto Craze in India
Indians have invested around $ 6.6 billion in cryptocurrencies till May 2021, according to an analytics insight report. This saw an over 600 percent jump from $923 million in April 2020. Nearly 1.5 crore Indians are said to have invested in cryptocurrencies. At present, over 350 startups operating in the blockchain and cryptocurrency space. Considering the huge interest from the investors and rapidly grown cryptocurrency market, the government is taking a careful approach towards cryptocurrencies but is likely to accept them in the financial system.