Bitcoin not to be recognised as currency: Centre's big announcement ahead of Crypto bill

In a written reply to the Lok Sabha, Union Finance Minister Nirmala Sitharaman made it clear that it has no proposal to recognise Bitcoin as an official currency. Raising a specific question in this regard, Independent MP Sumalatha Ambareesh and Congress MP DK Suresh mentioned that Bitcoin transactions are silently booming in India in the last few years. However, Sitharaman clarified that the Union government does not collect data on Bitcoin transactions. 

This response assumes significance amid the Centre's move to table The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the Winter session of Parliament. The Bill aims to "create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill 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". 

Cryptocurrency regulation in India

On November 13, PM Modi chaired a meeting on the way forward for cryptocurrency and flagged the issue of misleading non-transparent advertising regarding the same. As per sources, this meeting was conducted after a consultative process done by the Reserve Bank of India (RBI), the Finance Ministry and the Ministry of Home Affairs. While asserting that crypto markets cannot be allowed to become avenues for money laundering and terror financing, sources indicated that the Centre will continue to engage with all stakeholders.

Addressing the 8th SBI Banking and Economics Conclave on November 16, RBI Governor Shaktikanta Das expressed reservations over the prospect of legalising cryptocurrency in India. He was quoted as saying by PTI, "When the RBI, after due internal deliberation, says that there are serious concerns on macroeconomic and financial stability, there are deeper issues, which need much deeper discussions and much more well-informed discussions". Earlier, the RBI Governor had contended that online currencies can endanger the financial stability of the country. 

Accessing exclusive details of the Crypto bill, Republic TV learnt that cryptocurrency will be slotted as an asset class - a group of instruments that have similar characteristics and are governed by the same regulations. Thus, it implies that cryptocurrencies will be treated as other tradeable assets like stocks and bonds. However, the bill might bring in additional restrictions to take into account extra instability in blockchain technologies which affect the prices of cryptocurrency. Congress MP Abhishek Manu Singhvi and Shiv Sena parliamentarian Priyanka Chaturvedi have strongly opposed a ban on private cryptocurrencies.