A draft of a bill has been leaked in India inclining some to believe that the Indian government is considering prohibiting the use of cryptocurrencies in the country.
Even though its authenticity can be questioned, the draft which bears the title “Banning of Cryptocurrency & Regulation of Official Digital Currencies” has been circulating in social media through the technology lawyer Varun Sethi.
The draft defines cryptos as “any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value” and further states that “no person shall mine, generate, hold, sell, deal in, issue, transfer, dispose of or use Cryptocurrency in the territory of India.”
However, it is interesting to note the phrase “Official Digital Currency” since the bill also proposes a “Digital Rupee” under the strict control of the Reserve Bank of India. Indeed, the Indian government appears to attempt a monopolization of the crypto currency exchange in the country. If the bill passes, this would definitely hurt the crypto industry which is already plagued by legal uncertainty. Such uncertainty provoked three crypto exchanges to close shop in India and also possibly influenced Facebook’s decision not to launch its future crypto products in India even though the country is its largest market.
If its authenticity is to be believed, it is likely to be a topic of discussion in the ongoing parliamentary session.
We also point out that the bill does not, however, prohibit the use of blockchain technology as well as allows the use of cryptos for the purpose of research. As long as it does not involve the use of cryptocurrency for making or receiving payments, the bill permits Distributed Ledger Technology for creating a network for delivery of any financial or other services or for creating value.