The Lok Sabha, through its Bulletin dated 23 November 2021, has listed ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ among 26 other items of legislation that will taken up for consideration in the parliament, in its winter session starting 29 November.
The Government has stated that the said Bill would seek to ban all private cryptocurrencies in India, while allowing for some exceptions to promote the underlying technology. It has also been stated that the Bill will provide a framework for creating an official digital currency to be issued by RBI.
The news was followed by a crash of the cryptocurrency market with major digital currencies such as Bitcoin and Etherium witnessing a fall of around fifteen per cent (15%) or more.
For the sake of clarity, the relevant excerpt from the Lok Sabha Bulletin is being reproduced verbatim herein below –
“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.”
The Bill was first listed by the Government for the budget session, but it was subsequently deferred in order to seek wider consultation from all stakeholders involved. At the start of this month, the Prime Minister chaired a high-level meeting on the topic where officials from RBI, SEBI, and the Finance Ministry present. Following the meeting, the Parliamentary Standing Committee on Finance met the representatives of the crypto industry along with stakeholders and experts, where it was supposedly agreed that cryptocurrencies should not be banned, but regulated.
However, the Bulletin mentions that all private cryptocurrencies will be banned subject to certain exceptions. This has led to experts and stakeholders being divided on the exact meaning of “private cryptocurrencies”. Thus, the purport of the Bill is subject to varying interpretations at the moment and stakeholders will have to wait till the Bill is actually introduced and taken up for consideration in the Parliament to get more clarity.