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Crypto bill: Old legislation reworked, new law after cabinet approval says Sitharaman

‘No decision yet on banning advertisements’

18-Nirmala-Sitharaman Finance Minister Nirmala Sitharaman | Arvind Jain

Will cryptocurrencies be banned or regulated in India—if so, how, and what would come under its ambit? Such questions have haunted India’s crypto investors even since it became clear that “private cryptocurrencies” would be prhohibited under a soon-to-be-tabled legislation. But a clear answer on its ambit was not given on Tuesday, when Finance Minister Nirmala Sitharaman addressed the Rajya Sabha during the Winter Session of parliament. However, the FM said the proposed bill would be a new one, reworked from the earlier bill.

“Intent was either we improve [the old bill] or come with a bill which is going to be far more recent,” she said in response to a question by former Bihar finance minister Sushil Modi, adding that the Centre would introduce the new bill bill after it gets cleared by the Cabinet.

About the misleading advertisements and whether they would be banned, she said the guidelines and regulations of the Advertisements Standards Council of India (ASCI) were being looked into so that the Centre could take a decision on it.

She said that cryptocurrencies were unregulated in India and that the government does not collect data on its transactions. She noted that the Reserve Bank of India and the Securities and Exchange Board of India had been cautioning the public about cryptocurrencies being a “high risk” area, and said more could be done to create awareness.

She also said that the Centre was monitoring the non-fungible token (NFT) space too.

The description of the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, had proposed a ban on “private currencies”, with exceptions to “promote the underlying technology of cryptocurrency and its uses”. The description also proposed the creation of a “facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India”.

An earlier form of a bill mooted in the last parliament session, titled the “Draft Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019”, had sought to “prohibit mining, holding, selling, trade, issuance, disposal or use of cryptocurrency in the country”. The penalties provided under it included a fine and/or imprisonment up to ten years. It also stipulated that holders of cryptocurrencies would have to declare and dispose of them within 90 days of the commencement of the Act.

Nischal Shetty, CEO of crypto exchange WazirX, took an optimistic note on Twitter, saying it was “good to see some crypto talk by our FM”.

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