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Government To Introduce Bill To Ban Cryptocurrency In Parliament’s Winter Session

On Tuesday, the central government listed the Cryptocurrency and Regulation of Official Digital Currency Bill for introduction in the winter session of the parliament, which is scheduled to commence from 29th November. The bill seeks to ban all private cryptocurrencies. However, it has some exceptions to promote underlying technology and its uses.

The proposed bill also gives the Reserve Bank of India a chance to create an official digital currency. After the news, cryptocurrency prices crashed on Tuesday evening. As per NDTV, Ethereum fell by around 15%, Tether was down by almost 18%, and Bitcoin dropped over 17%. Recently, on 18th November, while addressing the Sydney dialogue, PM Modi said that all countries need to take measures so that cryptocurrencies do not end up in the wrong hands. There have always been debates about whether cryptocurrencies should be banned or should be regulated like shares or bonds. The central government has always hinted at favouring a ban on all private cryptocurrencies. However, there is a very vocal lobby that has been campaigning to include cryptocurrencies under a regulatory system.

The Reserve Bank of India has outrightly supported the ban as it has argued that cryptocurrencies can be used for illegal purposes. Recently, the Security Exchange Board of India (SEBI) banned all registered investment advisors from advising on unregulated instruments, including cryptocurrencies. While China recently banned all cryptocurrencies, El Salvador is the only country where cryptocurrency is used for official purposes.

Currently, 26 bills are listed to be introduced during the winter session of the parliament, and one of them is the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, according to the Lok Sabha website.

The news of the government bringing a bill to ban cryptocurrency came a week after a parliamentary panel was set up to discuss the pros and cons of cryptocurrencies. Chaired by BJP leader Jayant Sinha, the panel discussed about cryptocurrency’s future with various stakeholders and an agreement was reached that digital currencies should be regulated but can’t be stopped.

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