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The Indian government announced a new proposal that would seek to “ban all private cryptocurrencies” in place of an official central bank digital currency (CBDC).
India Seeks Crypto Ban, Again
The general information section (Bulletin-II) of today’s paper on the business of the Indian parliament listed a new bill titled, “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.”
The legislators have moved for “introduction, consideration, and passing” the law. The Indian parliament members will discuss the bill during the budget session, which commences on Jan. 29 and ends on Apr. 8.
The bill’s first purpose is to approve the creation of a digital currency issued by the country’s alpha banker, the Reserve Bank of India. Seeing the rise of CBDCs in recent times, the government’s decision does not surprise.
The next part of the bill’s purport, however, raises more questions than it answers. According to the document:
“The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”
Regarding “private cryptocurrencies,” various industry attempts to identity decentralized projects have gone in vain.
Moreover, even the SEC in the U.S. has long deliberated on securities laws applications on cryptocurrencies and is yet to reach a definition specific to digital assets. Only recently, the SEC came after Ripple, stoking general market fears. However, the U.S. regulatory agency seems to have stopped in its pursuit there, for the time being.
Furthermore, the Indian bill also allows for “exceptions” for the promotion of blockchain technology. It will be interesting to see the government’s definition of “private cryptocurrencies” and how it sets criteria for “exceptions.”
Finally, this is not the first time that lawmakers in the country seek a crypto ban. In 2019, a draft bill sought to impose a blanket ban on cryptocurrencies, prohibiting “holding, selling, or dealing.”
While the previous “damaging” bill phased out in time, the details of the bill introduced today will certainly spark a lot of debate among Indian crypto investors.
Disclosure: The author held Bitcoin at the time of press.