Cryptocurrency and Regulation of Official Digital Currency Bill, 2021

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is expected to be taken up for final consideration and passing during the winter session of the parliament, which is scheduled to start from November 29, 2021.

Key Points

• The bill seeks to prohibit all private cryptocurrencies in India, with some exceptions.
• This bill is among 26 new Bills, out of total of 29 Bills in the government’s legislative agenda.
• With Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, government seeks to create a facilitative framework for creation of official digital currency that will be issued by the Reserve Bank of India.
• It also seeks to prohibit all private cryptocurrencies in India.
• However, it allows some exceptions to promote underlying technology of cryptocurrency and its uses.

Background

This move comes after a week of first-ever Parliamentary panel discussion on crypto finance. During the panel discussion, a consensus was reached that cryptocurrency needs to be regulated, instead of its complete ban. Bill has been prepared after several meetings with stakeholders and discussions on regulating digital currencies. Prime Minister Narendra Modi had also chaired a high-level meeting with officials from RBI and several ministries on this issue. RBI and Securities & Exchange Board of India (SEBI) have voiced concerns on the unregulated growth of cryptocurrencies in India, by keeping vulnerable retail investors in focus.

About Cryptocurrency

Cryptocurrency is the collection of binary data, that works as a medium of exchange. Cryptocurrency does not exist in physical form. It is not issued by a central authority and use decentralized control.

Month: Current Affairs - November, 2021