Cryptocurrency Bill Likely to be Passed in Winter Session
The much awaited Cryptocurrency and Regulation of Digital Currency Bill, 2021 is likely to be taken up for discussion in the Winter session of Parliament, which commences on 29th November and will get over on 23rd December.
It is 1 among the 26 bills listed for introduction in the house. In addition, the 3 Farm Bills will also be withdrawn during the Winter Session.
The Cryptocurrency and Regulation of Digital Currency Bill, 2021 is intended to create a framework for the eventual launch of a digital currency by the RBI on the lines of what has already been launched in China.
However, while the RBI digital currency plans are well known, what the legislation will also seek to regulate is the issue of crypto currencies by private parties.
The RBI and the government have been uncomfortable with private cryptocurrencies in the light of the fact that it is tantamount to creation of money in an unregulated fashion. RBI has no control over private cryptocurrencies and that is the concern.
While the legislation will look at regulating the promotion of cryptocurrencies and luring of investors, it will look at ways to promoter the underlying blockchain technology that subsumes cryptos.
Even Prime Minister Modi had expressed reservations over the relentless and unregulated advertising of cryptocurrencies, including superstar endorsements.
Meanwhile, the legislation will also look at ways to have a proper regulatory and process mechanism for the creation and promotion of the official digital currency by the RBI. Government plans tweaking other acts to bring cryptocurrencies under the ambit of GST and Income Tax.
The background note to the legislation has observed that with the rise of the millennials in the investment mainstream, cryptocurrencies are one of the investment options they are looking at.
Many are also looking at cryptos as a non-fiat currency where money supply cannot be increased indiscriminately. Consequently, cryptos are also emerging as a digital alternative to gold.
It remains to be seen whether the legislations decide on a blanket ban on cryptocurrencies or looks at ways to regulate them. The latter is the path that most countries have adopted.
The reason cryptocurrencies like Bitcoin have rallied so sharply is due to the scarcity value. The only real thing to regulate is the way it is promoted and offered to clients in a reasonable and transparent way.
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