Cryptocurrency Bill 2021
The Central Government has finally announced that in the ongoing Budget session in Parliament it would implement a new bill on cryptocurrencies (The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 or the cryptocurrency bill ). Finance Minister Nirmala Sitharaman said that a ban on private cryptocurrencies in India, such as Bitcoin, has been proposed by an inter-ministerial committee (IMC) in India. Furthermore, the same committee has called for the creation of an official digital currency to be properly governed by the Indian Reserve Bank.
‘A high-level Inter-Ministerial Committee (IMC) set up under the Chairmanship of the Secretary (Economic Affairs) to research virtual currency issues and suggest concrete action to be taken in the matter recommended in its report that all private cryptocurrencies, with the exception of any virtual currencies released by the State, will be banned in India,’ FM Sitharaman reported in Rajya Sabha on February 9.
Recently, Parliament’s Minister of State for Finance Anurag Thakur also told the government that a bill on cryptocurrencies will be introduced by the government as current laws are insufficient to resolve cryptocurrency issues.
It should be noted that in 2018, the Reserve Bank of India (RBI) barred banks from processing crypto-currency related transactions. The Supreme Court, however, lifted the ban in a vacuum judgement dated 4 March 2020. Cryptocurrencies have been running in the country since then.
The RBI has now also explained that it is working on a digital version of the rupee, with results anticipated in the near future. A summary of the bill claimed that it aimed to “create a facilitative framework for the creation of the digital currency to be issued by the Reserve Bank of India”
How will India’s new cryptocurrency bill impact Bitcoin investors?
Analysts have suggested that some existing investors who are already invested in private digital currencies such as bitcoin in the country could be affected by the new cryptocurrency bill. This is because if the Centre goes by the Inter-Ministerial Committee’s (IMC) recommendation, private cryptocurrencies would be barred in the country, which will trigger a loss to the country’s current crypto investors undoubtedly. However, it is still not clear whether Bitcoin or Ethereum would be included in the list of banned private cryptocurrencies under the new cryptocurrency bill.
There is a possibility that the proposed cryptocurrency bill will allow holders of such currencies to leave the asset class before its planned prohibition, but may introduce a heavy penalty on their conversion to a legal asset.
Since the bill’s detailed details are not yet clear, there is a great deal of uncertainty as to whether or not anyone keeping Bitcoins or other cryptocurrencies can sell them. Around seventy lakh Indians hold cryptocurrencies worth over $1 billion, according to official estimates.