The issues being debated include the need for wider consultation and seeking comments from the public as well as whether the Central Bank Digital Currency (CBDC) to be introduced by the Reserve Bank of India needs to be a part of this bill or should be dealt with under the RBI Act.
“After several rounds of discussions at the highest levels, it was felt that any legislation surrounding cryptocurrency must be in tandem with a global framework which is still evolving. It might be a better strategy to wait and observe how this space evolves globally,” the official told ET. “Also, it was felt that the government could consider existing laws and regulations to ensure consumer protection and taxing cryptocurrency transactions in the meantime.”
Prime Minister Narendra Modi had on Friday called for united efforts to shape global norms for social media and cryptocurrencies to ensure they are used to “empower democracy and not to undermine” it at the Summit for Democracy hosted by US President Joe Biden.
Since cryptocurrency regulation is still evolving globally, Indian legislation must not be rushed but crafted with wide consultation, said the official cited above.
Regulation of CBDC
Policy makers are looking into whether the draft legislation should cover the CBDC.
“Since this is currency, it could possibly be regulated through the RBI Act,” the official said, explaining the thinking in the government.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, has been listed for the ongoing winter session of parliament. It had been listed for the last budget session as well but could not be introduced as the government decided to rework it.
As reported earlier, some highlights of the draft bill were said to include appointing the Securities and Exchange Board of India (Sebi) to oversee cryptocurrencies, as the government considers classifying these as financial assets. Another was giving crypto holders a deadline to declare their assets and meet any new rules. The bill is likely to use the term ‘cryptoassets’ instead of ‘cryptocurrencies’ and a 1.5-year jail term or a fine of Rs 20 crore for violation, ET had reported.