Government to introduce a new crypto bill, old bill reworked, says FM Nirmala Sitharaman

New Delhi: Finance Minister Nirmala Sitharaman said on Tuesday that the government is working on a new bill to regulate cryptocurrencies in India, assuaging investor concerns about the future cryptocurrency bill. "There were other aspects and the law had to be modified," Sitharaman said in Rajya Sabha. "Now we are attempting to work on a new Bill," she added.

There was a lot of talk about the regulatory capability of cryptocurrencies, and she added, "Let's wait for the bill."

During the Winter session of Parliament, the Centre was expected to present the 'Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.' "In addition, the measure wants to outlaw all private cryptocurrencies in India." However, it allows for some exceptions in order to promote cryptocurrency's core technology and applications," according to a Lok Sabha website bulletin. As a result of this news, bitcoin holders in India began panic selling on Indian markets. Last week, the Indian market saw a significant drop in Bitcoin, Ether, and all other major cryptocurrencies. The price of cryptocoins, on the other hand, eventually recovered.

As a result, the description of the Crypto Bill on the Lok Sabha website bulletin was outdated, and the government is planning to introduce a new cryptocurrency bill, according to the finance minister.

In July 2017, the central government commissioned a report on "Virtual Currencies: An Analysis of the Legal Framework and Recommendations for Regulation" from a research firm, according to the finance ministry. In the same year, the central government established a high-level inter-ministerial committee to address concerns relating to virtual currencies, led by Subhash Garg, Secretary, DEA. In July 2019, the committee produced a thorough report recommending that "all private cryptocurrencies, except those issued by the government, be prohibited in India."

On Tuesday, the finance minister informed Rajya Sabha that the risk of cryptocurrencies falling into the wrong hands is being monitored.

The government is close to submitting the crypto bill to Parliament, according to Sitharaman. It will be implemented after Cabinet approval. "This is a high-risk area that lacks a comprehensive regulatory structure." There was no determination made on whether or not its commercials should be banned. The RBI and SEBI are taking steps to raise awareness. During Rajya Sabha question hour, Sitharaman stated that the government will shortly introduce a bill on cryptocurrency.

"Rather than being outright prohibited, cryptocurrency in India needs to be controlled with a legal structure." Crypto is a unique asset class because it has no underlying intrinsic value other than demand and supply, similar to stamps or jewellery. Furthermore, the digital rupee is a very welcome step that will play a significant function in propelling India into the digital era of innovation, with numerous advantages over traditional physical currency," stated Raja Gopalakrishnan, executive vice president of FIS' Global Real Time Payments.

"Central Bank Digital Currency (CBDC) is introduced by a Central Bank," the finance ministry wrote in response to a question about CBDC. In October 2021, the government received a request from the Reserve Bank of India (RBI) to alter the Reserve Bank of India Act, 1934 to broaden the definition of "bank note" to include digital currency. RBI has been researching use cases and developing a phased deployment approach for bringing CBDC to market with minimal interruption.

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