India‘s decision to create a solid legislative framework for a central bank digital currency and to prohibit several token initiatives is sure to cause big waves in the market.
Although the Indian government may still be drafting a measure that would outlaw some cryptocurrencies, parliamentarians are unlikely to vote on any legislation during the current parliamentary session.
According to a report published on Dec. 17, India’s lower house of parliament, Lok Sabha, would not likely consider a measure prohibiting “all private cryptocurrencies” before the conclusion of its winter session on Dec. 23. The Cryptocurrency and Regulation of Official Digital Currency Bill did not feature on the government body’s agenda during the last days of its 2021 session.
The Indian government’s stance on cryptocurrencies
According to a Lok Sabha bulletin dated Nov. 23, Indian legislators might vote on legislation that establishes “a facilitative framework for the development of the official digital currency” issued by the Reserve Bank of India. Furthermore, the law proposes prohibiting the use of some cryptocurrencies. A similar measure has appeared on the parliament’s agenda before, but no vote on the regulatory framework or legal status of digital assets has taken place.
The Reserve Bank of India’s blanket prohibition on cryptocurrency, which had been in force for two years, was overturned by India’s supreme court in March 2020. Since then, reports from a variety of local media sites, as well as remarks from government officials, have suggested that the government is studying several options for regulating or banning digital assets.
Even if India’s parliament fails to pass crypto legislation, President Ram Nath Kovind may be able to use an order to expedite the bill when the Lok Sabha is not in session, which is expected to be between December and January. India’s Finance Ministry is also said to be exploring a regulatory structure that would treat cryptocurrencies more like commodities than currency.
With a population of 1.4 billion people, India’s decision to create a solid legislative framework for a central bank digital currency and to prohibit several token initiatives is sure to cause big waves in the market. Following the bill’s presentation to the legislative agenda in November, crypto exchange WazirX witnessed massive selloffs, with major price decreases for Bitcoin (BTC), Ether (ETH), and other tokens.