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Cryptocurrency Bill: Government has no plans to boost cryptos in India

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Cryptocurrency Bill: The government has no plans to boost the cryptocurrency sector in India, Finance Ministry told the Lok Sabha on Monday. A Bill on Cryptocurrency and Regulation of Official Digital Currency is expected to be taken up during the seventh session of the seventeenth Lok Sabha, it said. In the bill, the government plans to ban all private cryptocurrencies, "with certain exceptions."

Cryptocurrency Bill: Government has no plans to boost cryptos in India
The government has no plans to boost the cryptocurrency sector in India, the Finance Ministry told the Parliament in a reply to a query in Lok Sabha on Monday. It added since cryptocurrencies are unregulated in the country, the government does not collect data on the sector.
A Bill on Cryptocurrency and Regulation of Official Digital Currency is expected to be taken up during the seventh session of the seventeenth Lok Sabha, it said. In the bill, the government plans to ban all private cryptocurrencies, "with certain exceptions." It is also seeking to build a framework for the adoption of a central bank digital currency (CBDC). A CBDC is introduced by central banks, as opposed to private players, Fin Min said.
The government had received a proposal from the Reserve Bank of India (RBI) in October 2021 for the amendment to the Reserve Bank of India Act, 1934. In the proposal, it sought to enhance the scope of the definition of 'bank note' to include currency in digital form. The RBI has been examining the use cases and working out a phased implementation strategy for the introduction of CBDCs with little to no disruption.


The Ministry was asked the details of the predictability of CBDC and utility in banking transactions. To this, Fin Min replied that CBDC has "the potential to provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs, and reduced settlement risk."
"Introduction of CBDC would also possibly lead to a more robust, efficient, trusted, regulated, and legal tender-based payments option," it added. However, it warned there are associated risks, which need to be evaluated against the potential benefits.
The Ministry also said, since the CBDC would be backed by the RBI, therefore, apart from other benefits, it will not have "volatility associated with the private cryptocurrencies."
CNBC-TV18's Sapna Das contributed to this copy.


 
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