The Indian government will be considering a bill that would create a digital rupee as early as next week, but could also ban certain cryptocurrencies in the country.
According to a November 23 release, the House of Representatives of India, Lok Sabha, will officially consider cryptocurrencies and Digital Currency Bill regulations as one of 26 new bills when the government agency holds its winter session on November 29, the document said. Legislators can vote on laws that “create a framework for facilitating a formal digital” currency “issued by the country’s central bank, the Reserve Bank of India. In addition, the bill proposes to ban “all private cryptocurrencies” with the exception of properties “in order to promote the underlying technology of the cryptocurrency and its use”.
The same bill had previously appeared on the Indian Parliament’s agenda but did not result in the government voting on the Digital Asset Management Act. In March 2020, India’s highest court lifted a comprehensive ban on cryptocurrencies that the central bank had imposed on crypto companies for about two years. Since then, reports from various media outlets, as well as statements from officials, have suggested that the government is considering various solutions to regulate digital assets.
Related: The proposed law banning cryptocurrencies is under scrutiny by the Government of India
With a population of around 1.4 billion, India’s decision to create a specific regulatory framework for central bank digital currencies and ban many token projects is likely to create significant ripples across the room. Cashaa CEO Kumar Gaurav told Cointelegraph in January that the law was likely an attempt to prevent illegal activity in the industry rather than banning cryptocurrencies entirely.
If the proposed law goes into effect, Indian lawmakers will still have to grapple with how digital asset projects can be legally operated in the country, as well as the digital rupee. A September report by ET Now suggests the country’s tax department may tax revenue from cryptocurrencies through trade and exchange. Additionally, Treasury officials are said to be considering a regulatory framework that could treat cryptocurrencies as a commodity rather than a currency.