Cryotocurrency Bill may not be Introduced in Winter Session; Centre yet to Finalise Bill

Proposed cryotocurrency bill may not be introduced during the ongoing Winter Session of the Parliament, sources told The Centre is still working on the proposed bill to finalise a legal framework for cryptocurrencies in India. The government has held extensive consultations with various stakeholders to bring a well-rounded cryptocurrency bill.

Finance minister Nirmala Sitharaman earlier said that Centre will bring a new bill on cryptocurrency in the Parliament once Union Cabinet approves it. The proposed ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ is not on the agenda of Union Cabinet meeting scheduled on December 15, sources confirmed. It must be mentioned that the Winter Session of the Parliament will conclude on December 23.

Cryptocurrency Bill: Not a Blanket Ban

The description listed for ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ said, “The bill also seeks to prohibit all private cryptocurrencies in India.” As soon as the news of bringing a cryptocurrency bill during Winter session had emerged, the investors started panic-selling amid fear of a blanket ban on private currencies. However, the central government clarified later that they are reworking on the bill and it will take into account of various stakeholders’ interest and rapidly changing landscape of virtual currency space. “Yes, last time [monsoon session] there was a bill but subsequently because there were other dimensions…That bill has been reworked. And in a way the bill which is coming now is a new bill. But, never mind, the work done on that bill has all been taken on board here,” finance minister mentioned.

“There were other dimensions and the old bill had to be reworked and now we are trying to work on a new bill,” the finance minister added.

Answering on a question relating to cryptocurrency regularisation in India, Sitharaman said in Rajya Sabha earlier, “This is a risky area and not in a complete regulatory framework. No decision was taken on banning its advisements. Steps are taken to create awareness through RBI and SEBI. The government will soon introduce a bill.”

“There is no question that the technology underlying cryptocurrencies i.e. blockchain is a game-changer in the way that records are kept and transactions can be conducted. While we would encourage the government and regulators to build an enabling environment for innovation, the considerations around cryptocurrencies seem to be multi-fold and do mandate a debate and policy to ensure a healthy long term development for all stakeholders. Apart from SEBI’s intent to protect the retail investor from an investment class that has been very speculative, often at the mercy of tweets, there have been recent reports of hacking, concerns around money laundering and lack of clarity on taxation and accounting. We appreciate the government’s timely involvement to build supportive regulations especially as the volume of trading being witnessed on cryptocurrencies has reached significant levels,” said Nikhil Aggarwal, co-founder & CEO of GripInvest.

Cryptocurrency Bill: The Road Ahead

The central government had earlier made it clear that there is no plan to accept cryptocurrency as legal tender in India. However, the finance minister clarified that there was no plan to stop advertisements of virtual currencies by the exchanges. Further, the junior minister for finance, Pankaj Chaudhary, on being asked about the status of cryptocurrency trading in the country, elaborated that the government does not collect any information on the trading of the unregulated asset. The government would decide the road ahead with regards to cryptocurrency based on the recommendation of a high-level inter-ministerial committee and the legislative proposal if introduced in the parliament, he further added.