The Government of India is mulling the ordinance route to quickly impose a ban on the operation of private cryptocurrencies such as Bitcoin, in the country, according to local media networks.
Last week, the cabinet cleared the proposal to introduce the “Cryptocurrency and Regulation of Official Digital Currency Bill” via the ordinance route.
Reports state that the Prime Ministers Office (PMO), Finance Ministry and the Cabinet Secretariat have begun preparing the draft ordinance. The government is fast tracking the bill and is looking to introduce the law within a month of passing the ordinance.
The purported bill is listed to be introduced in the current session of parliament, which is the budget session. The ordinance is expected to be passed by the President of India after the parliament session.
The bill seeks to ban private cryptocurrencies while creating a framework for the official digital currency to be issued by Indian central bank, the Reserve Bank of India (RBI).
Meanwhile, leading crypto firms with operations in India such as WazirX, Unocoin, Zebpay, CoinDCX, CoinSwitch Kuber, and PocketBits have joined hands to launch a platform called Indiawantsbitcoin.org. They are expecting the regulators to address their concerns while drafting the bill.
In July 2019, a high-level committee, headed by Economic Affairs Secretary Subhash Chandra Garg, that the Government of India entrusted to draft a policy on cryptocurrencies, recommended that private cryptocurrencies like Bitcoin should be banned.
The committee also went to the extent of recommending up to 10 years jail term, and a fine of up to 250 million Indian Rupees or $3.3 million for a repeat offense. The committee observed that no country treats virtual currencies as legal tender. The current bill is also on similar lines.
At the same, the panel had urged the government to consider issuing official digital currency with a status of a legal tender and regulated by the central bank. It also recommended the promotion of blockchain technology in selected areas.
In India, the regulators and governments have been skeptical and are apprehensive about the risks associated with the ever popular private digital currencies, virtual currencies and cryptocurrencies.
Investors, crypto-exchanges and other entities had began dealing in the digital asset after India’s Supreme Court in early March 2019 struck down the RBI’s curbs on financial institutions under its preview to deal with cryptocurrencies.
This bought an end to the ban on the country’s commercial banks and other financial institutions providing services to businesses and individuals dealing in cryptocurrencies such as Bitcoin. The RBI had imposed the ban in April, 2018, but it was effective from July 2018.
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