Finance minister Nirmala Sitharaman on Tuesday, November 30, cleared the air on the upcoming cryptocurrency Bill that triggered panic and chaos among investors. Speaking at the winter session of the Parliament, Sitharaman on the day said that the government is at works to file a new Bill to regulate the use of cryptocurrency in India. In a reply to a question asked at the the Rajya Sabha, the finance minister said, “There were other dimensions and the bill had to be reworked and now we are trying to work on a new Bill.” She further revealed that there were extensive discussions regarding the regulatory capacity of cryptocurrencies and urged everyone to wait for the Bill, which is supposed to be tabled at the Union Cabinet soon.
In a Lok Sabha bulletin last Tuesday, the Centre had indicated that it would introduce the ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ during the winter session of the Parliament. “The bill also seeks to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” the Lok Sabha bulletin mentioned. Following this, chaos set in among investors who quickly jumped in to sell their assets. However, on Tuesday, Sitharaman clarified that the description was an old one and a new Bill would be introduced.
Here are the key things the government has said on the cryptocurrency Bill so far:
1. “The Bill (cryptocurrency Bill) also seeks to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” Nirmala Sitharaman told at the Rajya Sabha on Tuesday, clearing all doubts regarding the upcoming regulations.
2. “A Bill on Cryptocurrency and Regulation of Official Digital Currency for introduction in the Lok Sabha has been included in the Lok Sabha Bulletin-Part II as part of Government Business expected to be taken up during the Seventh Session of Seventeenth Lok Sabha, 2021. The question of monitoring cryptocurrency transactions, if any or regulating cryptocurrency transactions, if any is consequent to the passage of the Bill in Parliament,” the finance minister said in a written reply to a question asking if banks have resources to regulate cryptocurrencies.
3. “There were other dimensions and the bill had to be reworked and now we are trying to work on a new bill,” Sitahraman was quoted as saying in media reports. She also asked investors to remain cautious of frauds, citing statements from the Reserve Bank of India (RBI) as well as SEBI. The RBI has been vocal about banning cryptocurrencies in the country, given their potential to jeopardise the macroeconomic condition of the country.
4. “This is a risky area and not in a complete regulatory framework. No decision was taken on banning its advertisements. Steps are taken to create awareness through RBI and SEBI. The Government will soon introduce a Bill,” Sitharaman said in her reply to the Rajya Sabha on the cryptocurrency Bill.
5. When Bihar MP Sushil Modi asked if the government is building a separate framework for non-fungible tokens or NFTs, Sitharaman replied, “At this point, I won’t be able to say if there will be a framework. But all these matters are being discussed.”
6. Nirmala Sitharaman revealed that there were as many as eight cases of cryptocurrency fraud that are being investigated by the Enforcement Directorate.
7. “I don’t have the information about how much tax has been collected on cryptocurrency,” the finance minister replied to a question on how many people paid tax on cryptocurrency.
8. In a separate interaction, Sushil Modi told CNBC TV18 that it would be be very difficult to ban cryptocurrency sector. The government thinks that it is the best if they regulate it, he added.
9. On Monday, the finance ministry in another written reply said, “Central Bank Digital Currency (CBDC) is introduced by a Central Bank. Government has received a proposal from Reserve Bank of India (RBI) in October, 2021 for amendment to the Reserve Bank of India Act, 1934 to enhance the scope of the definition of ‘bank note’ to include currency in digital form.”
10. “Introduction of CBDC has the potential to provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs, reduced settlement risk. Introduction of CBDC would also possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option,” the finance ministry further said in the reply.