Betraying the hopes of the crypto industry that the Indian government will introduce the cryptocurrency regulation bill in the upcoming Monsoon session that kicks off on July 19, 2021, the list of bills that may tentatively be taken up does not include cryptocurrency bills.
Early this month, Indian Finance Minister Nirmala Sitharaman had said in an interview that her ministry is ready with a crypto bill and it will be put before the cabinet. This had raised hopes that the government may bring the bill in the coming parliament session. But the government has not listed the crypto bill among the legislations that can be taken up during the parliament session.
Though there are no official statements from the government, it is believed that the government has focussed on bills that need to be taken up and passed more urgently. It may not have considered the cryptocurrency bill to be urgent or significant enough to be taken up urgently.
Meanwhile, sources in the Indian crypto industry claim that the government and the central bank, RBI, are no longer on the same page about the future of cryptocurrency in India. RBI had put out a circular in 2018 asking banks not to offer banking services to cryptocurrencies. In 2020, the Supreme Court of India quashed the RBI circular as illegal.
The government followed it up with a proposed Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. The bill was to be introduced in the Budget session in February-March this year and it intended to ban cryptocurrencies and pave the way for an official digital coin under the aegis of RBI. However, the bill could not be introduced given the second wave of Covid-19.
The industry insiders claim that the government’s stand has softened and it does not want to completely ban the cryptocurrencies as envisioned in the bill that was to be introduced in the parliament in Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.
Over the last few months, people’s interest in cryptocurrencies has increased tremendously. Various tech lobbies are voicing their support for blockchain and cryptocurrencies as new technologies. Against this backdrop, the government may not want to be seen as a hurdle in the way of new technologies.
The cabinet may not have found time to go through and discuss the Finance Ministry’s note on the crypto bill. Many in the crypto industry think the government wants to set up a new committee to study the finance ministry’s proposals and give its recommendations.
Before the crypto bill gets to the parliament, it has to be endorsed by multiple ministries such as IT, Finance, and Law, and a few regulators such as the Securities Exchange Board of India (Sebi), and the RBI.