The Reserve Bank of India is planning to issue its own cryptocurrency that will be the only official digital currency in the country. The Lower House of India’s Parliament is already scrutinizing the draft bill which is likely to set the stage for legislation on cryptocurrencies.
Earlier, India’s government targeted online crypto exchanges which were not supervised by the financial authorities. Besides, India’s central bank used to ban crypto transactions and warned all banks to stop dealing with private cryptocurrencies. Apparently, such tough rhetoric has not achieved the goal. Thus, the government decided to shift focus and introduce the digital version of the national currency.
If adopted, the new legislation will become a tool for prohibiting all private cryptocurrencies in India and promoting the official one. The new law titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ will delegate the central bank the authority to restrict or even ban completely the use of any digital tokens and bar access to overseas trading floors. As an alternative to crypto assets beyond the control of the government and regulators, local crypto fans will be invited to trade the official digital currency based on the same blockchain technology. This compromise solution will benefit both the authorities and avid users of virtual money.