India does not have a regulated cryptocurrency market. The draft Cryptocurrency & Regulation of Official Digital Currency Bill, 2021 (‘Cryptocurrency Bill 2021’), which is yet to be passed by the cabinet, aims to ban all private crypto currencies except those issued by the state. So, no person shall mine, generate, hold, deal, issue, transfer or use of crypto currencies in the territory of India. However, the RBI has not proposed to ban underlying block-chain platforms.
Regulatory framework for Crypto currency in India
With many different forms of cryptocurrencies trading in India, the government sought to regulate the market as there was no law / act which governed cryptocurrencies. Reserve Bank of India (RBI) issued several notifications and circulars in 2013, 2017 and 2018 to safeguard the customers from its perception of potential threats from crypto. It was believed that crypto assets might lead to possible money laundering, fraud, and terror financing.
RBI’s 2018 circular led to a prohibition of the crypto industry in India which adversely impacted the homegrown crypto exchanges. Subsequently, in March 2020, the Supreme Court judgement was supportive of crypto assets and paved the way for lifting prior restrictions. The government then proposed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which intended to facilitate India’s own official digital currency issued by the RBI and allowing experimentation with other crypto assets.
The Ministry of Corporate Affairs (MCA) had also announced amendments to Schedule III of the Companies Act, 2013 in March 2021, which now mandates companies dealing with digital currencies to disclose profit or loss incurred on crypto transactions, the number of crypto assets held, and deposits held.
Major highlights of Cryptocurrency Bill 2021
The key purpose of the bill will be the “creation of the official digital currency to be issued by the Reserve Bank of India”.
The main purpose of the Cryptocurrency Bill, 2021
Read More: https://www.acquisory.com/ArticleDetails/86/Future-of-Cryptocurrency-in-India–A-new-journey
