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Govt to Ban All Cryptocurrencies After Introducing Bill in Winter Session Of Parliament


The government will introduce the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 in the Winter Session of Parliament, which is slated to begin on November 29.

Govt to Ban All Cryptocurrencies
Govt to Ban All Cryptocurrencies

Bill Introducing In Parliament

According to the Lok Sabha’s agenda, the central government will be introducing 26 bills in Parliament in the Winter Session, of which India’s first bill to regulate crypto will be one. These also include a bill to repeal the three farm laws, a proposal for which is to be discussed by the Union Cabinet on November 24.

Some of the other noteworthy discussions that have been listed by the Centre are on the amendments to banking laws with regard to privatisation of two PSBs, amendment to Banking Companies Acts, 1970 and 1980, and “incidental” amendments to Banking Regulation Act with regard to privatisation.

The news comes a week after the country held its first parliamentary panel discussion on cryptocurrency, wherein a consensus was reached on the need to regulate it.

On November 16, the Parliamentary Standing Committee on Finance chaired by Bharatiya Janata Party leader and former union minister Jayant Sinha had met representatives of the Blockchain and Crypto Assets Council (BACC), crypto exchanges, and industry associations, among other stakeholders.

However, the Lok Sabha bulletin did not provide any other details about the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.
Earlier this month, a high level meeting convened by Prime minister Narendra Modi held a comprehensive review on cryptocurrencies and the way forward.

Govt to Ban All Cryptocurrencies
Govt to Ban All Cryptocurrencies

Intension Of Government

Government sources had said that it was looking at “forward looking and progressive” regulation of cryptocurrency and they had made it clear that an unregulated market for digital currency cannot be allowed to become avenues for money laundering and terror financing.
During the meeting there was a strong view that attempts to mislead the youth through non-transparent advertising, that over-promised, needed to be stopped, sources had pointed out.
Shortly after this meeting, Parliament’s standing committee on finance met to seek views from various industry participants.

While suggesting that a ban may not help, industry representatives told the parliamentary standing committee that cryptocurrencies should be regulated since they cannot be stopped, amid concerns over security and investor protection by some of the panel members.
Addressing an event last week, PM Modi had also urged cooperation between the world’s democracies to ensure cryptocurrencies like Bitcoin do not “end up in the wrong hands”.
While the government and the RBI have been discussing the legislation on the issue for several months now, there has been a sharp increase in interest in cryptocurrency with several individuals, including senior citizens investing in private digital currencies.

India is estimated to have the largest number of cryptocurrency investors in the world, though value of investment could be smaller than in western countries.
The Reserve Bank has consistently maintained the need to ban private digital currency.
Earlier this year, the RBI had conveyed its decision to seek a ban on such instruments after expressing serious concerns.
While asserting that the technology of blockchain should be encouraged, the central bank questioned the purpose of cryptocurrencies to be labelled as a currency. It had said that a currency is a sovereign right and cannot be assigned to any individual entity.

Govt to introduce Cryptocurrency Bill in Winter Session of Parliament

There are concerns over volatility in their price apart from their impact on the economy.
The central bank has also raised security risks linked to cryptocurrencies, saying it could give rise to money laundering and terror financing because of the anonymity of the transactions.
The RBI has also pointed to the dangers to macroeconomic management if these instruments are allowed as they would pose “serious risks” to the financial system of the country.
In 2019, the government had appointed an inter-ministerial panel headed by the then economic affairs secretary Subhash Chandra Garg which had backed a ban on private cryptocurrencies.
Since then there has been intense discussions on the issue while the sector has lobbied hard to prevent a complete ban.

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