India plans to prohibit all 'private cryptocurrencies'

New Delhi: India plans to introduce a new law which seeks to prohibit all private cryptocurrencies in India. The Bill namely 'Cryptocurrency and Regulation of Official Digital Currency Bill, 2021' has been lined up for consideration during the Budget Session of Parliament.

The Bill will create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India, however, allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

Meanwhile, the industry stakeholders have come out in unison, hoping that the government will listen to all the stakeholders before taking any decision.

"Since the government is considering introducing the Bill during this session of Parliament, we are sure the government will definitely listen to all the stakeholders before taking any decision," said Sumit Gupta, co-founder and chief executive of CoinDCX, a cryptocurrency exchange in India.

"We are talking to other stakeholders and will definitely initiate deeper dialogue with the government and showcase how we can actually create a healthy ecosystem in unison," he said in a statement.

The Reserve Bank of India (RBI) is already exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalise it.

The RBI made the remarks in a booklet titled "Payment and Settlement Systems in India" released last week.

The apparent softening in RBI's stand on cryptocurrency came after the Supreme Court last year set aside a circular issued by the RBI that barred any entity from providing banking services to anyone dealing with virtual or cryptocurrencies.

The RBI in its booklet on payment systems noted that central banks around the world are examining whether they could leverage on technology and issue fiat money in digital form.

With the overall value of all cryptocurrencies surpassing the $1 trillion mark and Bitcoin hovering over $33,000, industry experts opine said that crypto may become the most important asset class of the 21st century and India needs to catch up fast with the global trend.

(From IANS with edits)