India is set to propose a new cryptocurrency bill in parliament, and investors are trying to make sense of what this might mean for the future of virtual coins in South Asia’s largest economy.
Lawmakers may ultimately opt to impose tough regulations on the crypto market instead of an outright ban on private coins, according to a top executive at Zebpay, one of India’s largest crypto exchanges.
A parliamentary bulletin dated Nov. 23 showed that the government plans to introduce a new bill aimed at regulating digital currencies when Parliament begins its winter session starting Monday.
Through that bill, India is seeking to ban most private cryptocurrencies as well as to establish a framework for creating an official digital currency to be issued by the Reserve Bank of India.
However, it will allow “for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” the bulletin said.
The central bank is considering a digital Indian rupee that could reportedly launch a pilot in the second quarter of 2022.
In March, India was considering a law that would ban cryptocurrencies, fine anyone trading in the country or even holding such digital assets, Reuters reported, citing a senior government official.
Since then, New Delhi has changed its stance slightly and is now trying to discourage trading in crypto by imposing hefty capital gains and other taxes, according to the news agency.
Prime Minister Narendra Modi this month gave a keynote address at the Australian Strategic Policy Institute’s The Sydney Dialogue where he said all democratic nations must work together on crypto to “ensure it does not end up in wrong hands, which can spoil our youth.”
When Finance Minister Nirmala Sitharaman was asked by the Hindustan Times if India should have its own cryptocurrency, she reportedly said, “We have to be cautious; but we have to think it through.”