The Indian government will consider a bill that would create a digital rupee starting next week, but may also ban certain cryptocurrencies in the country.
According to a November 23 post, the lower house of the Indian parliament, Lok Sabha, will consider the bill on cryptocurrencies and regulation of the official digital currency as one of the 26 new bills when the government body meets for its winter session on November 29. The document states that lawmakers could vote on legislation creating “a facilitating framework for the creation of the official digital currency” issued by the country’s central bank, the Reserve Bank of India. Furthermore, the bill proposes to ban “all private cryptocurrencies” with the exception of assets “to promote the underlying technology of cryptocurrencies and their uses.”
The same bill previously appeared on the Indian parliament’s agenda, but it has not led to the government voting on legislation to address digital assets. In March 2020, lIndia’s Supreme Court overturned a blanket cryptocurrency ban that the central bank had imposed on cryptocurrency companies for about two years. Since then, reports from many media outlets, as well as statements from officials, suggest that the Indian government is considering different solutions to regulate digital assets.
With a population of approximately 1.4 billion, India’s choice to establish a concrete legal framework for a central bank’s digital currency and ban many token projects would likely have significant repercussions across the ecosystem. Cashaa CEO Kumar Gaurav told Cointelegraph in January that the legislation was likely more of an attempt to prevent illicit activities in the industry rather than completely banning cryptocurrencies.
If the proposed bill were to come to fruition, Indian lawmakers would still have to address how to handle digital asset projects legally authorized to operate in the country, as well as a digital rupee. A September report from ET Now suggests that the country’s tax department could tax crypto earnings through trading and exchanges. Additionally, officials at the Indian Ministry of Finance are considering a legal framework that could treat cryptocurrencies closer to commodities than currencies.
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