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India to say no to private cryptocurrencies, but may soon introduce official digital currency

The Centre is all set to introduce a bill to ban cryptocurrency in the budget session

Cryptocurrency Representational image | Reuters

India might soon introduce an official digital currency issued by the Reserve Bank of India (RBI). In line with the plan, the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, banning all private cryptocurrencies and paving way for RBI's digital currency is likely to be tabled in Parliament during the current budget session. 

The government proposes to regulate cryptocurrency through the introduction of the bill. The purpose of the law has been described as to create a facilitative framework for an official digital currency issued by the RBI and to “prohibit all private cryptocurrencies in India”.

The details of the bill will be made public once these laws are tabled in the Parliament.

The RBI had, in 2018, banned crypto transactions following a slew of frauds after PM Modi's demonetisation move. The Reserve Bank of India had asked all regulated entities, such as banks, to stop any dealings related to private cryptocurrencies as part of that order, bringing crypto trading in India to a standstill. But the RBI embargo was overturned in March 2020 by the Supreme Court of India. However, there was still no clarity in crypto trading in the country. 

The bill is likely to end ambiguity on cryptocurrency which is neither banned nor legalised in India. 

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