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Government proposes bill to develop a digital Rupee while banning crypto-currencies

Ram Nath Kovind Nirmala Sitharaman Anurag Thakur
Finance Minister meets the President before heading to the Parliament. Source: @rashtrapatibhvn/Twitter

The Indian government will introduce a new bill to ban trading and investments in crypto-currencies during the Budget session of Parliament. At the same time, the proposed bill will provide the Reserve Bank of India (RBI) with the necessary legal powers to develop a central bank-backed digital currency (CBDC), according to the official Lok Sabha Bulletin Part II. While the government wants to promote the use of blockchain across various use-cases, it has decided to enter the global race of digital currencies or CBDCs while at the same time banning "private" crypto-currencies like Bitcoin and Ethereum among others. This is a similar approach to that of China, which banned trading and investments in crypto-currencies prior to developing its CBDC, which is still being tested. "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 cryptocurrency and its uses," — Lok Sabha Bulletin The government's decision to introduce The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 comes a week after the RBI said it had begun exploring the possibility of issuing and developing a digital currency or digital Rupee. This is a reversal of the RBI's position. Back in December 2019, RBI Governor Shaktikanta Das said that it was very early to speak on CBDCs. “Some discussions are going on. Technology has yet not fully…

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Reports on banking, payments, fintech and crypto-curencies. Additional reporting on media regulations, data protection and other areas.

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