Govt lists Bill proposing ban on private cryptocurrencies

The government has listed a Bill calling for a ban on all private cryptocurrencies to create an official digital currency issued by the Reserve Bank of India, according to a legislative order of business for the budget session of the 17th Lok Sabha.

In the listed Bill, the government says it plans to create a "facilitative framework" to establish an official digital currency while calling for a ban on all private cryptocurrencies.

"...however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses," it added.

Earlier this week, RBI in a note had said the central bank is exploring the "need for a digital version of fiat currency".

Investment in cryptocurrencies has gained momentum in the country in the past year.

A previous Bill proposed by the government in 2019 sought a complete ban on cryptocurrencies in India and criminalised its positions. However, the current Bill, The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, mentions exceptions to promote cryptocurrencies in India.

Sumit Gupta, CEO, CoinDCX. took to Twitter and sought clarity on private and public cryptocurrencies. "Globally, cryptocurrencies such as Bitcoin, Ethereum are considered public cryptocurrencies because of their open and public nature, where any participants can verify the transactions," he tweeted.

Last year, Supreme Court overturned a 2018 RBI order on using bank channels to carry out cryptocurrency-related transactions, thus creating a policy vacuum.

Gupta added that the distinction between public and private must be "explicitly" covered, He also said industry stakeholders are open to a dialogue with the government.