India mulls ban on cryptocurrency with new law; check details

New Delhi: The government is planning to introduce a law which will seek to prohibit the private cryptocurrencies in India and create a facilitative framework for an official digital currency issued by the Reserve Bank of India.

The legislative is listed for debate in the ongoing parliamentary session. The agenda is published on the official website of the lower house. 

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 seeks "To create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India. 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."

This is not the first time that such a discussion is taking place in the lower house. In 2019, a government panel suggested a complete ban on all the cryptocurrencies. The panel also suggested a punishment of jail term up to 10 years and huge fines for the individuals dealing with digital currencies.

This government panel takes a softer stance and asks the government to set up an official digital currency which will be approved by the Central bank of the country. This will allow the digital currency to work as a legal tender. 

The Reserve Bank of India in April 2019 gave strict orders to all the financial institutions to drop all the transactions which involve digital currencies such as bitcoin in the time period of three months.

The Supreme Court of India in March 2020 allowed the financial institutions to start their transactions with cryptocurrencies from traders and exchanges.