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Indian cabinet discusses new crypto bill on official digital currency

According to an official bulletin posted on November 23, a new crypto regulation bill titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill’ purporting to ban private cryptocurrencies and create an official digital currency has been introduced in the Lok Sabha, the Indian Parliament’s common house. The Cabinet’s discussion has been ongoing in the Parliament Winter Session 2021 since November 29.

On November 30, India’s current Minister of Finance and Corporate Affairs Nirmala Sitharaman said in Rajya Sabha or the upper house of the Indian Parliament that the bill would be introduced in the House once it has been approved by the Cabinet members despite it not being on the ‘List of Business’ of the Lok Sabha.

The crypto bill is said to facilitate the investment and trade of crypto in India under certain restrictions. According to the bulletin announced by Lok Sabha on November 23, the crypto bill is intended to ‘create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India. It also seeks to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.’

Opinions about the bill are divided with crypto experts like Sharat Chandra, a blockchain and emerging tech evangelist, informing Financial Express in an interview conducted on November 24 that the government still needs to clear up what they mean by private cryptocurrencies. 

Chandra said, ‘That’s where the government needs to come clean. How are they defining cryptocurrencies? If I am tokenizing a piece of real-world asset, say real estate or shares for that matter how will this crypto token be treated? Ideally, an assessment framework should be devised to classify the tokens depending upon their utility and use cases’. Chandra ended his statement by saying that there is no one size fits all approach in crypto.

In an interview with Financial Express on November 24, Edu Patel, CEO and co-founder of crypto investment platform Mudrex, said the government needs to be clear about its definition of private cryptocurrencies since crypto tokens are created by companies and not the government. 

In Patel’s words, ‘the term private cryptocurrencies is interesting because there was news about governments coming up with their own cryptocurrency. These cryptocurrencies are known as CBDCs or Central Bank Digital Currencies there could be a possibility that these CBDCs are public cryptocurrencies and all others be classified under private cryptocurrencies.’ Patel also mentioned that it would be ‘interesting’ to see what would come under the ambit of the government’s ‘private cryptocurrencies’. 

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