Cryptocurrency Bill: What Will Be India’s Stand on Digital Assets?

After a long discussion by the Indian Government over cryptocurrencies in the country, finally a cryptocurrency bill is tabled before the Union Cabinet and everyone is waiting for approval. The bill attempts to regulate virtual currency in India. Presently cryptocurrencies in India are not under any regulation, this makes an unofficial area for Indian investors. 

On Monday, Finance Minister Nirmala Sitharaman said that the cabinet note was ready on the cryptocurrency bill. She was awaiting Cabinet to clear that, she added. 

Under the chairmanship of the Secretary (Economic Affairs), a high-level inter-ministerial panel was formed to explore the issues related to cryptocurrencies and propose specific actions that have already submitted its report. The report advocates that all private cryptocurrencies except the digital currencies that are issued by the state will be forbidden in India. 

In the meantime, the RBI discusses the cryptocurrencies traded in the market and has conveyed the same to the government.

Back in May this year, the finance minister conveyed that a very calibrated position is supposed to be taken on crypto and virtual currency as the world is promptly transforming towards technology. Other media reports indicated that bitcoin and other cryptocurrencies may be permitted as an asset class in India.

Highlighting the fact that both the government and the RBI are dedicated to financial strength and solidity, RBI Governor Shaktikanta Das said there are no differences between the central bank and the Finance Ministry on the matter, and that all should now await the final decision on the matter from the Centre.

Major concerns regarding cryptocurrencies have been identified by the RBI and that the government is in agreement with those concerns, said Mr. Das. 

Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to control the production of its units and validate the transfer of funds, working independently of a central bank.

Reserve Bank of India (RBI) said, a three-judge bench, led by Justice R F Nariman, is responsible to be set apart on the ground of "proportionality".

"Therefore, the writ appeals are enabled and the circular dated April 6, 2018, is set apart," said the bench, which is also involving justices Aniruddha Bose and V Ramasubramanian.