The Union budget is scheduled for Monday , February 1st and one of the key bills slated to be introduced namely the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 (Crypto Bill) seeks to ban all private cryptocurrencies in India with certain exceptions for promotion of the underlying technology of cryptocurrency and its uses.
Whilst internationally many countries are making amends to prescribe regulations, this blanket ban on private cryptocurrency seems like a rather strong step by India. On the forefront this is a step to ensure State’s involvement in the world of cryptocurrency (bitcoin, ether etc.), however the fact that cryptocurrency offers easier cross-border payments and better record keeping cannot be overlooked.
Cryptocurrency defined: In an earlier version of the Bill, Cryptocurrency has been defined as any information, code, number or token, generated through cryptographic means or otherwise, which has a digital representation of value and has utility in a business activity, or acts as a store of value or a unit of account.
Objective of Crypto Bill: The objective behind the Cryptocurrency Bill is slated to be the facilitation of a framework for the yet to be issued official digital currency by the RBI, and to prohibit all private cryptocurrencies in India. The Bill seeks to ban the use of private cryptocurrency as currency and also bans trade and mining of cryptocurrency.
Fines and imprisonment: As per an earlier version of the Bill, any such activity shall be punishable with a fine or imprisonment of up to 10 years, or both.
If the Crypto Bill sees the light of the day, then India shall become the sole Asian State to impose a ban on private cryptocurrency against the mainstream thought process of regulating and promoting them. The outcome of this Bill might hence also have a considerable impact in the Stock market, and thus stay tuned for further updates which shall be provided post the session.
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