The government will soon introduce a new crypto bill, said Finance Minister Nirmala Sitharaman during Question Hour in Rajya Sabha today.
The Finance Minister said that regulation of NFTs is also being discussed by the Centre.
The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 seeks to ban all but a few private cryptocurrencies to promote underlying technologies while allowing an official digital currency by RBI.
A Bill on Cryptocurrency and Regulation of Official Digital Currency for introduction in the Lok Sabha has been included in the Lok Sabha Bulletin-Part II, as part of the government business expected to be taken up during the ongoing winter session.
The Bill seeks to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India (RBI) for the ongoing winter session of Parliament. It also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.
After approval of the Cabinet, the government will introduce a new crypto bill in Parliament after Cabinet approval, FM Nirmala Sitharaman said.
Bill to be introduced after Cabinet clears it
Speaking in Lok Sabha, the finance minister said, "We are close to bringing a bill in parliament.. It will be introduced in the house once cabinet clears the bill."
The government had also listed a similar Bill for the last Parliament session (monsoon) but it was not taken up.
''The earlier attempt was definitely to come up with a Bill that the house can consider. But, later, because rapidly a lot of things had to come into play, we had started working on a new Bill. This is the Bill that is now being proposed,'' she said adding that there was a ''genuine attempt'' to bring the Bill even during the monsoon session.
The minister informed the house that the proposed legislation is likely to be introduced soon.
No ban on advertisments on cryptocurrency
The government will not ban advertisements on cryptocurrency. Stating this in Lok Sabha, Finance Minister Nirmala Sitharaman said, "This is a risky area and not in a complete regulatory framework. No decision was taken on banning its advisements. Steps are taken to create awareness through RBI & SEBI. "
Sitharaman said the guidelines of Advertising Standards Council of India are being studied and their regulations are also being looked into ''so that we can take, if necessary, some kind of position or a decision to see how we can handle it''.
The minister also said cryptocurrencies are unregulated in India and the government does not collect data on transactions in cryptocurrency.
Sitharaman also said the government, RBI and Sebi have been cautioning people about the cryptocurrencies that could be a ''high risk'' area and ''more can be done'' to create awareness.
Study conducted on virtual currencies
A study was conducted by the government through a research firm on 'Virtual Currencies: An Analysis of the Legal Framework and Recommendations for Regulation' in July 2017. Thereafter, the government constituted an interministerial committee (IMC) in November 2017 under the chairmanship of the secretary (economic affairs) to study the issues related to virtual currencies and propose specific action to be taken in this matter.
The committee, inter-alia, recommended that all private cryptocurrencies be prohibited in India. The panel also recommended that it would be advisable to have an open mind regarding the introduction of an official digital currency in India.
Industry reacts
Anndy Lian, Chairman, BigONE Exchange said, "There is a need to have a good understanding on how cryptocurrencies in India will be like. Firstly, there is no blanket ban. The crypto bill in circulation is an old bill. The regulators are reworking on the new bill. Secondly, there is no proposal to recognise Bitcoin as a currency. With the given scenarios, it is only right for the government not to ban advertisements on cryptocurrency related promotions. But do bear in mind, there are advertising laws in India such as the Press Council of India Act, 1978 and there is an Advertisement Standard Council of India to observe fairness. Therefore, this does not mean that crypto companies can go "Wild Wild West '' and put up misleading messages or advertisements promising sure-win schemes."
