Govt to move Bill to ban all private cryptocurrencies; check out reactions from the industry

The Centre has proposed to present a Bill on cryptocurrency in the upcoming Winter Session of Parliament to facilitate creation of the official digital currency to be issued by the Reserve Bank of India (RBI).

As per the official statement, the proposed 'Cryptocurrency and Regulation of Official Digital Currency Bill, 2021' seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology and its uses. "The bill aims to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India," the statement further said.

Industry experts were quick to react to Centre proposing to table to Bill in the Winter Session, which is scheduled to be held from November 29 to December 23.

As the news broke, Nischal Shetty CEO, Founder Wazir X, exclusively told BT, "The stance of government looks similar to the last one. Will have to go through the contents of the bill. Bitcoin is a public cryptocurrency on a public blockchain."

He also added, "This is a big moment for India... Our nation has come a long way in these 3 years! It speaks volumes about how India is determined to dominate the web 3.0 era."

Kashif Raza, founder of crypto education platform Bitnning pointed out that the government's proposal "[what] we have today seems to be similar to the Bill presented by the government last time as well. The only thing that is spooking crypto investors now is the clause about banning private cryptocurrencies. Basically if we go by this, only those backed by the government will be allowed, not the rest. But this is not the final one. We need to exercise caution and wait for the full bill to be tabled in the parliament."

Sathvik Vishwanath, Co-founder and CEO Unocoin commented, "The definition of what constitutes 'private cryptocurrency' is not available anywhere, no matter whichever we try to read it. Also concerning the few lines that we have today from the government, it is same as as the bill they presented before. Nothing seems to have changed. We have to tread cautiously about this. it is a very arbitrary title that was there last time, it is the same now as well. If we go by the three, four lines that have come out today, it could seem like that there is no new bill, it is the same as the old one. For the time being, we just cannot make any sense out of this yet. But yes, investors are certainly apprehensive."

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Saying that elements of the full Bill are needed for clarity in order to gauge its impact, Edul Patel, CEO of Mudrex, a global crypto investment platform, added, "Indian government had stated their intention to come up with its own cryptocurrency to be able to track the flow of money. These cryptocurrencies are known as Central Bank Digital currencies or CBDCs...it will likely aid in easing the tax calculation on crypto gains. It will be interesting to see the classification of cryptocurrencies based on the use cases."

Currently, there are no particular regulations or any ban on use of cryptocurrencies in the country. Against this backdrop, Prime Minister Narendra Modi, on Saturday, held a meeting on the crypto currencies with senior officials and indications are that strong regulatory steps could be taken to deal with the issue.The sources said the proposed bill would focus on investor protection as cryptocurrencies come under a complex asset class category.

In August, Finance Minister Nirmala Sitharaman said she was awaiting an approval from the Cabinet on the cryptocurrency bill.

Also Read: Winter Session 2021: Cryptocurrency Bill proposes to ban all pvt cryptocurrencies with certain exceptions

Also Read: Here's everything you need to know about RBI's digital currency