Indian Government Has No Plans to Recognize Bitcoin as Currency
Rather than recognizing Bitcoin's use as a currency, India plans to prohibit most “private cryptocurrencies” and pilot test a central bank digital currency in 2022.
Key Takeaways
- In a Monday Parliament session, India's finance minister Nirmala Sitharaman revealed that the government has no plans to recognize Bitcoin as a currency.
- Last week, the government proposed a law intended to create a framework for a CBDC issued by the Reserve Bank of India.
- The ruling also "seeks to prohibit all private cryptocurrencies," only allowing for certain exceptions to promote blockchain technology and its uses.
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The Indian government has no intentions of recognizing Bitcoin as a currency, India’s finance minister Nirmala Sitharaman revealed in a Monday Parliament session.
Indian Authorities Remain Reserved on Crypto
India has reiterated its aversions to crypto.
In a Parliament session earlier today, India’s finance minister Nirmala Sitharaman said that the government had no plans to recognize Bitcoin as a currency, adding that the government currently doesn’t collect data on Bitcoin transactions. “No, sir,” she said in response to a question about whether the country had intentions to acknowledge the asset’s potential as a currency.
India has had a mixed approach toward cryptocurrencies over the past few years. In 2018, the Reserve Bank of India, the country’s central bank, issued a circular prohibiting all cryptocurrency transactions. However, in 2020, the Indian Supreme Court struck the regulator’s ruling, noting that the bank could not impose disproportionate restrictions on the asset class in the absence of any legislative ban on crypto transactions.
Now, the proposal to ban cryptocurrencies appears to be on the table once again—this time via the government. According to a Parliament bulletin published on Nov. 23, Indian lawmakers are set to debate and vote on the “Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” in December. While the new law primarily intends to create a framework for the RBI’s central bank digital currency, which is set to roll out next year, it also “seeks to prohibit all private cryptocurrencies.”
The ruling is reportedly targeting a ban, only allowing for certain exceptions “to promote the underlying technology of cryptocurrency and its uses.” While it is still unclear which assets would fall under the category of “private cryptocurrencies,” the term seems to refer to all cryptocurrencies issued by private parties rather than only privacy-preserving digital coins like Monero. That means the ruling would also include Bitcoin.
This is not the first time the Indian authorities have made efforts to outlaw cryptocurrencies. In January, the government attempted to introduce a bill with nearly identical language, and in 2019 it proposed a draft bill seeking a blanket ban on cryptocurrencies.
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