Earlier meetings between digital currency exchange executives and top government officials have pointed to the likelihood of the country embracing regulation rather than an outright ban for the nascent digital asset class.
At present, India has no proposal to recognize the premier digital asset, Bitcoin (BTC) as a currency in the country according to Finance Minister, Nirmala Sitharaman. Prior to this time, the Reserve Bank of India (RBI) has maintained a very tough stance against cryptocurrencies over time and the bank’s push may see the majority of privately issued digital assets banned through legislation.
In addition to the Finance Minister’s comments on giving Bitcoin no hope of being recognized as a currency in India, she also noted that transactions bordering on digital assets are not monitored by the Indian government.
India is pushing for a comprehensive crypto regulation as the parliament’s winter session opened today. Deliberations on the Bill dubbed The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, seeks to create a framework to regulate the proposed digital currency billed to be issued by the Reserve Bank of India (RBI).
Under the provisions of the new bill, privately issued cryptocurrencies will be banned. The encompassing ban will leave a few exceptions that will help propound the technology behind the digital assets. The fate of digital currencies is at a very critical point in India, and the final outcome of deliberations from the parliamentary session will showcase the survival positioning of active players in the industry including cryptocurrency trading platforms.
The passage of the Bill is arguably essential as India looks to roll out the Digital Rupee in response to the rise of cryptocurrencies in the nation. The bill will help clear off the competition that the government-backed Central Bank Digital Currency will be likely to face upon its rollout. In all, the bill will develop the legal framework upon which the CBDC will exist or be integrated into the current financial and payment ecosystem in India.
India Bitcoin Legislation: The Place of Crypto Exchanges
Earlier meetings between digital currency exchange executives and top government officials have pointed to the likelihood of the country embracing regulation rather than an outright ban for the nascent digital asset class.
The Finance Ministry, through Pankaj Chaudhary, Minister of State, has detailed the conditions it laid out for trading platforms to relate or power transactions involving cryptocurrencies in the country.
“Government does not collect information on trading in cryptocurrency,” he reiterated, adding that, “Cryptocurrencies are unregulated in India. RBI has vide its circular dated May 31st, 2021, advised its regulated entities to continue to carry out customer due diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittance.”
With the Bill scheduled to emanate from the ongoing parliamentary winter session, further clarity on the digital currencies to relate with is bound to be showcased sooner than later.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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