Budget 2021: Centre lists bill to ban all cryptocurrencies in India, create official digital currency

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In this Budget 2021 session, the Centre plans to introduce a bill to ban the all cryptocurrencies in India  such as Bitcoin. The government will also put in place the framework for an official digital currency to be issued by the Reserve Bank of India.

This is among 20 new bills, which the Government intends to introduce this Union Budget, which will be presented on February 1. 

The new bill has been titled as ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’. The Centre  is looking towards the introduction, consideration, and passing of this bill.

“To create a facilitative framework for 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 crytptocurrency and its uses,” purport of the bill as mentioned in Lok Sabha bulletin said.

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Issued on 25th Jan, RBI booklet on payment systems also showed that the central bank is exploring whether to issue a digital version of the rupee.

“Private digital currencies have gained popularity in recent years," the central bank booklet said.

“In India, the regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks. Nevertheless, RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and, in case there is, how to operationalize it," it noted.

The RBI had in 2018 effectively banned crypto transactions and had asked all regulated entities, such as banks, to stop any dealings related to private cryptocurrencies as part of that order. This brought cryptocurrency trading in India to a halt.

However, that embargo was overturned in March 2020 by the Supreme Court bench, headed by Justice Rohinton F Nariman, quashed the central bank’s circular on grounds of disproportionality.

Meanwhile, the price of Bitcoin, the most popular crypto currency, surged to as high as $38,000 attracting more and more people to invest in them. Now the price has come down to around $33.8 thousand.

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