The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, listed for introduction in Parliament’s Winter Session starting November 29, seeks to “create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India”.
- The Bill “seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses”.
- There is currently no regulation or ban on cryptocurrencies in India; however, national responses to defining and regulating virtual currencies vary widely in jurisdictions around the world.
- The regulatory and policy response can vary from complete openness of the kind seen in countries like El Salvador, which has approved bitcoin as legal tender, to a total clampdown like in China, which has imposed stringent regulations on both cryptocurrencies and service providers.
- The United States and European Union have been proactive in trying to pin down the regulatory mandate, while discussions continue.
- Countries such as India are somewhere in between — still in the process of figuring out the best way to regulate cryptos after some policy and regulatory experimentation.