India to Ban Cryptocurrencies, Creates Own One

Hours ago, India announced plans to to ban private cryptocurrencies such as bitcoin and provide a framework for the creation of an official digital currency issued by the Reserve Bank of India. A bill will be considered in the ongoing Budget session of Parliament, according to bloomberg report.

''Since the government is considering introducing the bill during this session of Parliament, we are sure the government will definitely listen to all the stakeholders before taking any decision,” said Sumit Gupta, co-founder and chief executive of CoinDCX,a cryptocurrency exchange in India.

Moreover, in April 2018, the RBI had effectively banned cryptocurrency transactions via banks and e-wallets. That move was also backed by the Supreme Court initially, though it later quashed the circular issued by the central bank.

At the time, RBI reported that the move was necessary to curb “ring-fencing” of the country’s financial system. It had also argued that Bitcoin and other cryptocurrencies cannot be treated as currencies as they are not made of metal or exist in physical form, nor were they stamped by the government.

This proposal was challenged by several exchanges and traders, who filed a lawsuit in the Supreme Court. The nation’s apex court ruled in their favor last year. This ruling was seen as historic but it did not impact the earlier circular on the policy level.

In addition, a similar bill was drafted in 2019, as well as, panel was set up that proposed a 10-year prison sentence for persons who hold, sell, or deal in cryptocurrencies including Bitcoin. However, the government didn't bring that proposal to action.