The proposed Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is unlikely to be brought to the floor of Parliament during the current session. This is because the government is seen looking for wider consultations on its cryptocurrency Bill in order to bring it in line with international rules and regulations.
Among the several important bills being tabled this winter session in the Parliament, one which could have had wide implications was the proposed Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. But it seems unlikely the bill will be brought to the floor at least in the current session.
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According to the Lok Sabha website, the Bill was to be introduced "to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”
The Bill will also "create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India," the bulletin had added.
Why is the cryptocurrency Bill not being introduced?
The government is deferring introducing the cryptocurrency Bill to obtain more feedback and bring a bill that is more in line with international standards, sources told CNBC-TV18.
“The government wants to see how global standards on cryptocurrencies evolve in the EU and other jurisdictions,” sources said.
As it gathers wider consultations for their proposed Bill, the Centre found itself short of time to bring a reworked Bill in Parliament as the winter session ends on December 23.
The parliamentary panel on cryptocurrency had, in November, sought feedback from representatives of crypto exchanges, Blockchain and Crypto Assets Council (BACC), industry bodies, and other stakeholders in cryptofinance. The panel under BJP’s Jayant Sinha concluded that cryptocurrencies need urgent regulation but not an outright ban.
Prime Minister Narendra Modi had met with senior officials last month to discuss the possible regulatory steps needed for cryptocurrency and related assets. PM Modi had also asked for nations to work together to prevent the misuse of cryptocurrencies and emerging technologies and added that cryptocurrencies should "empower" democracies and not threaten them.
The Union Cabinet has not yet given its approval to the Bill, even though it was reported that the proposed Bill was discussed nearly a week ago. Now the Bill has been dropped from the list of the schedule for the last working days of Parliament in the current session.
What will happen now?
As the government deliberates further on its proposed Bill and the Bill will not be enacted into law by Parliament in the current session, this does not prevent the Centre from issuing an ordinance or a special order so that some regulations governing cryptocurrencies are in place in the interim period.
The government can also take up the matter in a few months when Parliament returns to the Budget session. With the urgent need for bringing regulations in the rapidly developing space and the RBI’s strong stance against private virtual currencies, it is unlikely that the government will wait for long before introducing the Bill in parliament.
(Edited by : Thomas Abraham, Yashi Gupta)
First Published: IST