Cryptocurrency regulation bill listed for winter session, private cryptocurrencies to be banned

The wait for cryptocurrency regulation in India may soon come to an end: On Tuesday, the government listed the “Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” for the coming winter session of parliament.

"To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses."

For nearly two years, the future of the cryptocurrency landscape in India has hinged on a simple factor: What the name of the coming bill to regulate it will be called.

The name of the draft “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019” suggested a poor outlook for a sector dominated by decentralised non-government coins.

While the new bill’s name loses the “ban” word, the description’s call to “prohibit” all private cryptocurrencies suggests the end of the road for the trading of coins like Bitcoin, Ethereum and Dogecoin in India.

The mention of "official digital currency" reflects the ambition of both the governmetn and the Reserve Bank of India to launch a Central Bank Digital Currency. A recent Business Standard report said a pilot launch of an RBI digital currency could take place in the first quarter of the next fiscal.

Nischal Shetty, founder and CEO of Indian cryptocurrency exchange WazirX, hailed the development.

“This is a big moment for India. From a banking ban in 2018 to listing the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the Parliament’s winter session. Our nation has come a long way in these 3 years! It speaks volumes about how India is determined to dominate the web 3.0 era,” Shetty said.