Central banks around the world are working on digital currency. The Reserve Bank of India is also one of them. The central government is soon going to bring legislation to ban private cryptocurrency and the framework for official digital currency.
Uncertainty about the legitimacy of cryptocurrency in India has put investors in doldrums. According to some reports, investors in India have held a digital currency of about 10,000 crore rupees. The government is now in favor of bringing its own digital currency by banning private cryptocurrency in the country. RBI will have the responsibility of managing the Indian digital currency. It is believed that after the new law comes, the existing cryptocurrency holders will also get a chance to get out of it. But such investors and traders will have to share their information about trading, mining and holding.
The Reserve Bank of India has also indicated on several occasions that it is working on its own digital currency. Work on the digital currency of the central bank is still going on. Recently, RBI Governor Shaktikanta Das said that an RBI team is working on technology. At the same time, another team is working on how to rollout the cryptocurrency in India.
The cryptocurrency bill was to be introduced in the budget session itself
It was proposed to introduce ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ in the budget session of Parliament. The bill has a provision for banning private cryptocurrency as well as a regulatory framework for launching a new ‘official digital currency’.
But the government is still discussing this bill with various stakeholders. Therefore, this bill could not be introduced in the budget session.
The government wants to consider every aspect of the new bill
Before introducing the bill, every dimension is being considered in detail under a lengthy process. The report of the expert panel is followed by inter-ministerial discussion, cabinet secretary meeting and report submission of the concerned people. In this bill, attention is being paid to everyone’s attention.
Existing holders can get 3 to 6 months time
In the inter-ministerial meeting, it has been discussed that the existing holders of cryptocurrency should be given 3 to 6 months to get out of mining and trading. This committee had earlier expressed its opinion in favor of banning private cryptocurrency. However, media reports have said that the final draft of this bill has not been prepared yet.
RBI says it is exploring options under Distributed Laser Technology (DLT) to improve financial market infrastructure. The central bank is working on the same possibilities with the Central Bank Digital Currency (CBDC). The government is also ready to support the digital currency of the central bank.
Banks around the world are working on their own cryptocurrency
RBI is working on digital currency and still has all the routes open. The Bank for International Settlement recently said in a report after a survey that out of 66 central banks, about 80 percent of central banks are looking for digital currency options. These central banks are paying maximum attention to the possibilities of digital currency in their country’s economy.
Many startups regarding cryptocurrency have been launched
Regarding private cryptocurrency, RBI believes that this will encourage illegal activities and will increase the risk to financial stability. It was only in April 2018 that banks and their regulated units announced a ban on the use of cryptocurrencies.
In March 2020, the Supreme Court, in a decision, declared this ban as unconstitutional. Many startups have also been launched about the potential of cryptocurrency in India.
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