The agenda, which was posted on the House of Representatives website, said the law “will create a framework to facilitate the creation of the official digital currency to be issued by the Reserve Bank of India (RBI),” according to Reuters.
The legislation, which is under discussion in the current parliament, seeks to “ban all private cryptocurrencies in India, however, it allows for some exceptions to promote the underlying technology of cryptocurrencies and their uses,” according to the agenda.
In mid-2019, an Indian government committee recommended that all private cryptocurrencies be banned, with a prison sentence of up to 10 years and heavy fines for anyone dealing in digital currencies.
However, the committee asked the government to consider launching an official government-backed digital currency in India, to function like banknotes, through the Reserve Bank of India.
The Reserve Bank of India had ordered financial institutions in April 2018 to cut all ties with individuals or companies dealing in virtual currencies such as Bitcoin within three months.
However, in March 2020, the Supreme Court of India allowed banks to handle cryptocurrency transactions from exchanges and merchants, resulting in the repeal of the central bank ban which dealt a major blow to the booming industry.
Governments around the world are looking for ways to regulate cryptocurrencies but no major economy has taken the drastic step of imposing a blanket ban on owning them, despite raising concerns about misuse of consumer data and its potential impact on the financial system.