Government attempts to ban Bitcoin again; Considers digitizing the rupee

Government attempts to ban Bitcoin again; Considers digitizing the rupee

"The Bill also seeks to prohibit all private crypto-currencies in India; however, it allows for certain exceptions to promote the underlying technology of crypto-currency and its uses" said the goal of the Bill in the papers placed before the bulletins.

India plans to introduce a law to ban private cryptocurrencies such as bitcoin and put in place a framework for an official digital currency to be issued by the central bank, according to a legislative agenda listed by the government.

The framework will be decided during the current budget session of the parliament.

The central bank is looking into the need for a digital version of the fiat currency and how to implement it. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

The bill, entitled, "Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019", was drafted by an inter-ministerial committee headed by former Department of Economic Affairs (DEA) secretary Subhash Chandra Garg.

The RBI made the remarks in a booklet titled "Payment and Settlement Systems in India" released last week. The panel also suggested that the government explore a digital version of the Indian rupee. The bill may spark an end to the nascent cryptocurrency industry in the country. An RBI official earlier told Inc42 that the plan didn't see much groundwork in late 2018 and 2019 as Bitcoin continued to dip in and numerous countries such as Russian Federation and China who were working on fiat-crypto projects too didn't launch their official cryptocurrencies as expected.

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Experts believe that merely proposing a bill doesn't mean that it will get a legal shape any time soon. "Right regulations will catapult India to the forefront of this [cryptocurrency] technology".

Vishal Gupta, Co-Founder of Bitcoin Alliance, predicts that the business of cryptocurrencies will continue - irrespective of the government move.

The country has WazirX, BuyUcoin, CoinDCX, and CoinSwitch Kuber, among others as leading cryptocurrency platforms that would be directly impacted by the restrictions planned by the government. We've been preparing for this. RBI also called for establishing a native digital currency.

India is going to legalise the crypto-currencies and it is expected that the Government of India (GOI) is going to come out with its own digital currency.

This logic is at odds with the government's intention to digitize the rupee.

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