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The government plans to introduce an official digital currency soon.

The Union Finance Ministry has announced that it will make a decision on creating a state-issued cryptocurrency shortly, despite a global increase in cryptocurrencies.

The Union Finance Ministry has announced that it will make a decision on a state-issued cryptocurrency soon, but will outlaw all private cryptocurrencies, despite a global increase in cryptocurrencies. Union Dy Director (Currency) Sanju Yadav confirmed in a letter to VHP leader Girish Bharadwaj dated 10 November that all private cryptocurrencies are still not considered legal tender or coins in India, but the government may develop an official digital currency. The VHP leader had demanded that all cryptocurrencies be banned, claiming that they were being used to fund terrorism, narcotics, and other ‘anti-national crimes.’

Cryptocurrency parliamentary panel

The Parliamentary Standing Committee on Finance met with industry associations and experts on Monday to discuss ‘CryptoFinance: Opportunities and Challenges,’ and concluded that cryptocurrencies cannot be prevented but must be regulated. MPs’ main concern was the security of investors’ funds, citing full-page cryptocurrency adverts in national newspapers as an example. The government intends to regulate cryptocurrencies and bring it under the control of the federal government’s tax system. PM Modi has also convened a conference with specialists to explore cryptocurrency and related financial challenges, including how it might be used for money laundering and terror financing. CoinSwitch Kuber and CoinDCX are the two crypto unicorns in India right now.

For the previous two sessions, the Centre has planned to propose the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in Parliament. The bill’s goal is to outlaw all private cryptocurrencies while also laying out the regulatory framework for the introduction of a “official digital currency.” Prior to outlawing crypto trading, mining, and issuing, it will provide a 3-6 month departure period. The RBI intends to control the state-issued cryptocoin using DLT (Distributed Ledger Technology). The law is still being debated and has yet to receive Cabinet approval.

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