India To Ban The Use Of All Cryptos Apart From Digital Rupee, Leaked Draft Bill Reveals
A copy of a draft bill that seeks to ban cryptocurrencies in India has been uploaded on Scribd by blockchain lawyer and enthusiast Varun Sethi.
The draft bill is referred to as “Banning of Cryptocurrency & Regulation of Official Digital Currencies Bill 2019,” has been circulating online but its eligibility cannot be confirmed.
If the bill is approved by the Indian Parliament and consequently asserted, it will put a blanket ban on the use of cryptocurrencies in the country.
According to the bill, a cryptocurrency is:
“Any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchanged with or without consideration, with the promise or representation of having inherent value in any business activity which may involve risk of loss or an expectation of profits or income, or functions as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, investment schemes.”
The 18 pages document categorically says that no individual will be permitted to use cryptos in India whether as a medium of exchange, store of value or unit of account. The document adds that cryptos shall not be used as legal tender at any part of the country.
The bill also bans mining, generating, holding, selling, dealing in, transferring, disposing or issuing cryptocurrency and those who are found contravening this will be liable for punishment with fine or with an imprisonment of not less than one year but one that can extend to ten years or both.
The Digital Rupee
Although India has been against cryptocurrencies, the leaked draft bill lays out the provision for “Digital Rupee” as well as official foreign digital currency which will be given by the Reserve Bank of India.
The bill describes Digital Rupee as
“a form of currency issued digitally by the Reserve Bank and approved by the Central Government to be legal tender.”
The bill also introduces a foreign digital currency which is described as any class, category or type of digital currency that is recognized as a legal tender in a foreign nation. The bill states:
“The Central Government, in consultation with the Central Board of the Reserve Bank, may approve Digital Rupee to be legal tender with effect from such date and to such extent as may be specified.”
Previously, there have been rumors that the Indian government was preparing to launch its own cryptocurrency but the country’s central bank has refuted these claims terming them as just rumors. The draft, which is set for deliberations in the current ongoing parliamentary session, excluded the use of blockchain technology from restrictions and also allowed the use of cryptos for research.
If the bill is passed, it might completely kill the struggling crypto industry in India where several crypto exchanges have been forced to exit due to legal uncertainties and harassment from government agencies.
In other related news, Finance Magnate reports that Facebook has decided not to launch its much-awaited crypto, Libra in India due to hostilities towards the cryptos by the government. This is despite the country being the largest market for Facebook’s products.
Should India reconsider it stance about cryptocurrencies? Let us know in the comments section.