India plans to create official digital currency, ban private cryptocurrencies

According to a legislative agenda listed by the government on Friday, India is planning to introduce a law to ban cryptocurrencies such as bitcoin. The agenda further adds that a framework is put in place for an official digital currency that shall be issued by the central bank, reported Reuters.

The law will “create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India (RBI),” Reuters quoted the agenda published on the website of Lok Sabha.

The legislation seeks “to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” the agenda said.

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The Reserve Bank of India (RBI), had in April 2018, ordered all financial institutions to break ties with businesses dealing in bitcoins.

To which, the Indian government panel, in mid-2019, had recommended banning all private cryptocurrencies. And a jail term of 10 years or hefty fines for individuals dealing in bitcoins.

However, the panel has asked the government to mull launching a government-backed cryptocurrency through the Reserve Bank of India. The cryptocurrency will function in the capacity of a virtual banknote.

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In March 2020, the Supreme Court of India had allowed banks to handle cryptocurrency from exchanges and traders.

Globally, governments have been looking into ways to regulate cryptocurrencies.