India is preparing a law banning cryptocurrencies such as bitcoin, as well as a framework for the issuance of an official digital currency by the country’s central bank.
The law will “create a framework for the creation of the official digital currency to be issued by the Bank of India (RBI),” as stated in the agenda, which was published on parliament’s website on Friday.
The legislation, set for debate in the current parliamentary session, seeks to “ban all private cryptocurrencies in India, but allows some exceptions to promote the underlying technology and its uses.”
In mid-2019, an Indian government committee proposed banning all cryptocurrencies, with prison sentences of up to 10 years and hefty fines for those involved.
However, the committee asked the government to consider launching an official digital currency backed by India to operate like banknotes through the Reserve Bank of India.
The RBI, in April 2018, ordered financial institutions to sever all ties with individuals or companies dealing with currencies such as bitcoin within three months.
However, in March 2020, India’s Supreme Court allowed banks to handle related transactions by stock exchanges and traders, overturning the central bank’s ban.