India mulls official digital currency, proposes law to ban crypto assets

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India mulls official digital currency, proposes law to ban crypto assets

India, the fifth-largest economy across the globe ahead of Britain, has been exploring an option to present a law to deter trades of private cryptocurrencies and digital assets such as bitcoin alongside to implement a new nomenclature of an official digital currency issued by the Reserve Bank of India (India’s Central Bank), a legislative agenda introduced on the lower house website had unveiled.

According to the legislative agenda listed by the Government of PM Narendra Modi, lawmakers had proposed a new law that would “create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India (RBI)”.

India seeks to ban cryptocurrencies

On top of that, the agenda listed for debate in the country’s current parliamentary session said, “The legislation seeks to prohibit all private cryptocurrencies in India; however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

In point of fact, latest legislation proposed by the lawmakers came against the backdrop of a recommendation from a Government panel that had urged in mid-2019s to ban all private digital assets with a jail term of up to 10 years alongside financial penalties for anyone trading the digital assets in the country.

Nonetheless, the panel had also asked the Government to contemplate the rollout of an official Central Bank-backed digital currency which in effect would act as bank notes. Besides, back in the April of 2018, the Reserve Bank of India had issued an executive order that prevented financial institutions to maintain their tie-ups with individuals or businesses dealing in digital assets likes of bitcoin, the original cryptocurrency, within three months, but, in March 2020, the Supreme Court of India had reversed RBI decision and allowed financial institutions such as banks to deal with transactions in crypto assets from brokers and exchanges.

If truth is to be told, lawmakers alongside Central Banks across the globe were vying to vent out a way to regulate cryptocurrencies, however, no major steps were inclined so far as tech-savvy traders keep looking for a loophole to push crypto assets into mainstream financial system.