Can you tell me some of the highlights of the proposed Cryptocurrency Bill?

The much anticipated Cryptocurrency and Regulation of Digital Currency Bill, 2021 is one of the 26 bills that is slated for discussion, debate and passage in the winter session, that begins on the 29 November and closes on 23 December. This will be the last session before the Union Budget session and is likely to see a rush of bills to complete the unfulfilled promises of the last budget. These 26 bills are apart from 3 Farm bills to be withdrawn.

The Cryptocurrency and Regulation of Digital Currency Bill, 2021 will broadly aim to create a proper legal and procedural framework for the ultimate launch of a digital currency by the RBI. This is something that China has already done and India has been looking at that option to reduce the dependence that Indians are having currently on private cryptos, which are often less than reliable. The bill will regulate issue of crypto currencies by private parties.

In short, the RBI has been uncomfortable with private cryptocurrencies since they create money in an unregulated fashion. RBI has little control over private cryptocurrencies and that is something that is worrying most central banks. that is the concern. Even the Prime Minister had expressed reservations over the unregulated advertising of cryptocurrencies, including by well-known and influential superstars offering endorsements.

The bill will focus on regulatory and process mechanism for the creation and promotion of the official RBI digital currency, including GST and Income Tax implications. It may not ban private cryptos but will look to regulate the creation and promotion of cryptos as an asset class. However, the RBI and the government have been favourably inclined towards the underlying technology of Blockchain for its multifarious uses. The bill will be interesting.