Heading into what could be a stormy winter session of Parliament, the government intends to bring a Bill to repeal the three new agriculture laws and another on prohibiting “all private cryptocurrencies in India” with “certain exceptions”.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is listed for introduction — one of 26 Bills — in Lok Sabha in the winter session starting November 29.
The Bill seeks 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”.
Currently, there is no regulation or any ban on the use of cryptocurrencies in the country.
Prices of popular cryptocurrencies have been off their highs this month. While they were trading on an upward trajectory Tuesday, no significant movement was witnessed in the prices of these currencies following the announcement this evening of the Lok Sabha business. According to coinmarketcap.com, while Bitcoin was up 0.09 per cent in a 24-hour period, the price of Ethereum was up 2.68 per cent.
Earlier this month, Prime Minister Narendra Modi called a meeting on cryptocurrencies with senior officials. The indications are that strong regulatory steps will probably be taken to deal with the issue.
There have been a rising number of advertisements, featuring even film stars, promising easy and high returns on investments in cryptocurrencies. There are concerns that such currencies are allegedly being used for to lure investors with misleading claims.
Last week, the Standing Committee on Finance, chaired by BJP member Jayant Sinha, met representatives of crypto exchanges, Blockchain and Crypto Assets Council (BACC), among others, and came to the conclusion that cryptocurrencies should not be banned, but regulated.
The Reserve Bank of India has repeatedly underlined its strong view against cryptocurrencies, saying these pose serious threat to macroeconomic and financial stability of the country. It has also raised doubts on the number of investors trading on cryptocurrencies and their claimed market value.
Earlier this month, RBI Governor Shaktikanta Das reiterated his opposition to cryptocurrencies, saying these pose a serious threat to any financial system since they are unregulated by central banks.
The RBI announced its intent to come out with an official digital currency in the face of proliferation of cryptocurrencies like Bitcoin, about which the central bank has had many concerns.
Private digital currencies/virtual currencies/ cryptocurrencies have gained popularity in the past decade or so. But regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks.
On March 4 this year, the Supreme Court set aside an RBI circular of April 6, 2018, prohibiting banks and entities regulated by it from providing services in relation to virtual currencies.
The four-week session of Parliament is also expected to witness the introduction of the Electricity (Amendment) Bill to de-licence power distribution and increase competition, and Bills meant to extend the tenure of the directors of the CBI and ED from two to five years. The proposed legislation on both have already drawn criticism from Opposition parties.
The Samyukt Kisan Morcha, the umbrella body of farm unions protesting against the three farm laws, has also demanded withdrawal of the electricity Bill.
The extension of tenures of the CBI and ED chiefs via ordinances has already been opposed by the Congress and Trinamool Congress.
Among the Bills listed for passage during the session are the Assisted Reproductive Technology Regulation Bill, 2020 (Surrogacy Bill) and the Maintenance and Welfare of Parents and Senior Citizens (Amendment) Bill, the banking amendment Bill and the IBC amendment Bill.