Bill to ban private cryptocurrencies to come up in Winter Session

The government has listed a bill for the upcoming winter session of Parliament, starting November 29, seeking to ban all private cryptocurrencies. This is among the 26 pieces of legislation, including the repeal of three farm laws, listed for the session. 

The price of Bitcoin was down sharply from Rs 46 lakh to Rs 40 lakh in just about 90 minutes after this news came in.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, seeks to “prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” according to the list of business for the winter session of Parliament. 

The Union Cabinet is yet to clear the legislative measure for cryptocurrency, though it’s a formality, an official said. The farm bills are listed for the Cabinet meeting scheduled for Wednesday.   Through the cryptocurrency legislation, a facilitative framework will be created for an official digital currency.

This will be issued by the Reserve Bank of India (RBI). Given the importance of the move and the need for wider stakeholder consultation, the Opposition is likely to demand that the bill, whenever it is discussed, be referred to a parliamentary committee.

This process helps create bipartisan agreement on important policy issues.

The cryptocurrency bill is listed at a time when the level of interest in the subject is very high. A meeting led by Prime Minister Narendra Modi had recently emphasised that democratic nations must ensure that cryptocurrency does not end up in "wrong hands”. However, the consensus at the meeting was that democracies should invest together in research and development of future technology.

The Reserve Bank of India has continued to caution the country against cryptocurrency. RBI governor Shaktikanta Das recently described cryptocurrency as a threat to the financial system.      

Even the Rashtriya Swayamsevak Sangh, the parent organization of the BJP, had called for a quick government ban, on the grounds that cryptocurrency has the potential to destabilize sovereign economies.