Hopes Of A Progressive Approach Die As Indian Government Seeks To Ban Most Cryptocurrencies In New Bill

The Indian government is set to impose an outright ban on almost all private digital currencies including bitcoin and ethereum. This is according to a highly-anticipated bill that has been submitted for deliberation during the upcoming winter session of the parliament that starts November 29.

India To Ban Private Cryptocurrencies

According to a Tuesday report, India’s lower house of parliament will look into The Cryptocurrency and Regulation of Official Digital Currency Bill as one of the 26 new pieces of legislation when it convenes this coming Monday.

The bill intends to ban all private cryptocurrencies in India while allowing some exceptions in order to bolster the underlying technology of cryptocurrencies and their applications.

If passed, it will also reportedly provide a framework for the creation of a Central Bank Digital Currency (CBDC) by the Reserve Bank of India (RBI). The RBI is preparing to launch a pilot project for the digital rupee in 2022. 

Notably, the new bill bears some semblance to the draft tabled during the parliamentary session in January. Yet, a renewed sense of optimism regarding the Indian government softening its stance on the crypto sector has spilled into the markets in recent months.

India’s Shifting View On Crypto

The latest news comes amid an ongoing back-and-forth over India’s long-touted complete ban on crypto. While opponents of India’s ban have long argued that it would stifle innovation, the central bank and government continue to grapple with the question of a potential crypto ban.

In March 2020, India’s Supreme Court reversed the ban on crypto that was imposed by the country’s central bank in 2018. The RBI later told banks not to rely on an old circular that barred them from working with crypto-focused companies. It was then reported earlier this month that India was working towards regulating crypto as an asset while only prohibiting its use for payments.

Last week, unnamed sources familiar with the matter revealed the government’s intentions to ban the holding and trading of cryptocurrencies that it has not approved.