Deliberations centre on whether the Reserve Bank of India’s Central Bank Digital Currency (CBDC), which it plans to create, should be included in this measure or fall outside the purview of the RBI Act.
“Legislation relating to cryptocurrencies must be developed by a global framework that is currently growing, after multiple rounds of debate at the highest levels. It’s possible that waiting and seeing how this area develops worldwide is a better plan, “ET was informed by the official. It was also thought that the government might use current rules and regulations to assure consumer protection and tax cryptocurrency transactions in the interim. ”
At the Summit for Democracy sponsored by US President Joe Biden on Friday, Indian Prime Minister Narendra Modi called for a concerted effort to set global rules for social media and cryptocurrencies so that they be used to “empower democracy and not to destroy it.”
According to the person stated above, Indian law should not be hurried but should be extensive consultation due to global cryptocurrency regulation.
The CBDC Is Regulated
Policymakers are considering whether the CBDC should be included in the proposed law. According to an official in the government, “Since this is a kind of money, it may potentially be controlled under the RBI Act,” the person said.
Parliament’s winter session has included the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. Although it was scheduled to be presented in the last budget session, it was postponed because the administration revised it.
Sebi would be tasked with overseeing cryptocurrency since the government is considering designating it as a financial asset, according to some of the highlights of the draught law. Another was setting a deadline for cryptocurrency owners to register their holdings and comply with any new regulations that could be implemented.
Regulators Are On High Alert Because Of The Potential Dangers
The Securities and Exchange Board of India (Securities and Exchange Board of India) may regulate cryptocurrencies as financial assets, according to specific sources. According to references cited by the Business Standard, both the Securities and Exchange Board of India (also known as Sebi) and the Reserve Bank of India (RBI) are hesitant.
Bitcoin and other virtual currencies pose a severe threat to the economy and financial stability, according to RBI Governor Shaktikanta Das. According to him, Indians’ involvement in cryptocurrencies seems to be overblown.
According to estimates from cryptocurrency exchanges, more than 2 million people in India have invested at least Rs 15,000-20,000 crore in the cryptocurrency business. Many in government think that rules are urgently required given the industry’s rapid growth.
The Prime Minister of India, Narendra Modi, presided over a meeting on cryptocurrencies on November 13. According to these same authorities, cryptocurrency-related advertising campaigns that over promise and lack transparency should be discontinued.
Why Hasn’t The Cryptocurrency Bill Been Enacted Into Law?
Cryptocurrency legislation is being put on hold to get more input and create a law that is more by international norms; sources tell CNBC-TV18.
According to reports, there is a desire to watch how the EU and other countries deal with cryptocurrency. The Center could not submit a modified Bill before Parliament adjourned for the winter recess on December 23 as it had hoped to do.
Representatives from crypto exchanges, Blockchain and Crypto Assets Council (BACC), industry organisations, and others involved in crypto finance were contacted by a parliamentary subcommittee on cryptocurrencies in November for their thoughts. The panel led by BJP’s Jayant Sinha concluded that cryptocurrencies need immediate regulation but not outright prohibition.
What Is Going To Happen Next?
However, as the government is still deliberating on a draft Bill, and Parliament is not expected to vote on it during the current session, the Center is free to issue an ordinance or a particular order to establish temporary legislation for cryptocurrencies.
The administration may address the issue when Parliament reconvenes for the next Budget session in a few months. It seems doubtful that the government would wait long before putting the Bill into parliament, given the pressing need for laws in this quickly evolving area and the RBI’s firm position against private virtual currencies.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was significant legislation introduced during Parliament’s winter session. However, it is doubtful that the bill would be taken to the floor during the current legislative session.