India’s crypto industry faces an uncertain future, with a proposed draft bill threatening to impose a blanket ban on the entire crypto industry. It further paves the way for the Reserve Bank of India (RBI) to issue a digital rupee. The newest threat to digital currencies in India comes months after a similar effort to outlaw the industry. Known as the “Cryptocurrency and Regulation of Digital Currency Bill 2021,” it will be considered in the ongoing Budget session of Parliament.
The bill intends to outlaw all cryptocurrencies.
In its Lok Sabha bulletin, the government claimed that the bill intends to “prohibit all cryptocurrencies in India.” “However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” it stated, referring to blockchain technology. India has been embracing blockchain in recent months. In its most recent effort, the state of Tamil Nadu adopted an ethical blockchain policy to promote adoption. The proposed bill also seeks to pave the way for a central bank digital currency. It claims to “create a facilitative framework for creating the official digital currency to be issued by the Reserve Bank of India.”
RBI announced an interest in the possibility of a digital rupee.
This comes barely a week since India’s central bank announced an interest in the possibility of a digital rupee. As reported earlier, the regulator stated, “The RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalize it.” The proposed bill could set the stage for a digital rupee. In China, for instance, the government amended a longstanding law to accommodate the digital yuan.