India is to launch its own official digital currency, but will also ban private cryptocurrencies under new government proposals
The Indian government is readying a cryptocurrency bill for Parliament, which will ban most private cryptocurrencies.
And India’s central bank meanwhile will launch an official digital currency of its own, the Guardian reported.
India’s move comes after China began a crackdown on all cryptocurrencies earlier this year. It began taking stronger measures against crypto transactions and mining activities in May, and then in June China told banks and payment platforms to stop facilitating crypto transactions and issued bans for crypto miners.
Then in September China’s central bank said it considers all cryptocurrency transactions “illegal”.
While India is no friend of China, the Indian government is proposing to ban most private cryptocurrencies and launch an official digital currency of its own, as revealed in a parliamentary bulletin listing upcoming legislation.
This legislation, the Guardian reported, included one paragraph on “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021”.
The accompanying description of the bill appeared to leave some room for using cryptocurrencies, however.
“To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India,” it reportedly states. “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.”
India’s prime minister, Narendra Modi, reportedly said last week that cryptocurrencies could “spoil our youth” and the country’s central bank has repeatedly warned, in line with other central banks, they could pose “serious concerns on macroeconomic and financial stability”.
The stance of countries such as India and China to cryptocurrencies stands in marked to the South American country of El Salvador.
In September El Salvador became the first country in the world to accept Bitcoin as a legal tender.
This week El Salvador’s president Nayib Bukele announced his intention to build a brand new ‘Bitcoin’ city, financed by government Bitcoin bonds.
The city would be built at the base of a volcano in the country, where geothermal energy could be used to help power it.
A day later the International Monetary Fund warned El Salvador against its rush into cryptocurrency.