India plans to introduce, evaluate, and enforce a bill to prohibit “all private cryptocurrencies” in the country, according to a legislative agenda for the winter session.
The Indian government said Tuesday evening that the proposed law will allow “certain exceptions” to promote the underlying technology of cryptocurrency and its uses.
The bill — called Cryptocurrency & Regulation of Official Digital Currency Bill 2021 — will also create a “facilitative framework” for the creation of the official digital currency for the country, the legislative agenda adds.
Lawmakers in India have been discussing risks of cryptocurrency trading and trialing a government digital currency for some time. But the country is yet to have a legislation to oversee the space.
An increasingly growing number of Indians, many of whom have never invested in the stock market or anything else, have started to trade cryptocurrencies in recent quarters, prompting concerns among some that they might end up losing their money.
In the meantime, local cryptocurrency exchanges have reported growing volumes of transactions and userbase and raised capital from high-profile investors. CoinDCX, backed by B Capital, and CoinSwitch Kuber, backed by a16z and Coinbase Ventures, became unicorns this year.
India’s Prime Minister Narendra Modi, and several other lawmakers as well as several industry stakeholders met as recently as earlier this month to discuss the space and some of the recent developments.
Many lawmakers expressed concerns about the nature of ads carried by cryptocurrency exchanges. A consensus was reached in that meeting that these “irresponsible advertisements”, that promised wild profits to consumers by investing in crypto, were misleading youths in the nation and must be stopped, TechCrunch reported earlier.
Several Bollywood stars including legendary Amitabh Bachchan and Ayushmann Khurrana and Ranveer Singh, who have starred in several of the country’s biggest blockbusters, have promoted cryptocurrency trading in TV and newspaper ads.
Lawmakers have also expressed concerns around potential misuse of using crypto trading vehicles for laundering money and financing terrorism efforts.
Shaktikanta Das, Governor of the central bank Reserve Bank of India, said last week that the country needs to have much deeper discussions on the issue of cryptocurrencies.
“When the central bank says that we have serious concerns from the point of view of macroeconomic and financial stability, there are far deeper issues involved,” Das said at an event. “I’m yet to see serious, well-informed discussions in the public space on these issues.”
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