Speculations on upcoming Crypto Bill rise; experts weigh in

The much-awaited Crypto Bill is to be introduced in the ongoing winter session of the parliament. The journey of Cryptocurrencies in India began from a Bill to Ban Cryptocurrencies back in 2016 to a Bill for Regulation presently in 2021. The claims of The upcoming Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 being a replica or quite similar to the bill presented earlier back in 2019 have been clarified by Finance Minister Nirmala Sitharaman on the floor of the house. 

Amidst all the speculations, Nichal Shetty, Founder & CEO, Wazirx tweeted on November 23rd, 2021- 

“Feels like Feb 2021 all over again. The Crypto regulation bill has been listed for the winter session. The description hasn’t changed much There will be speculation on both sides. The good thing is more people within the Government are aware of how crypto works. #IndiaWantsCrypto” 

Finance Minister Nirmala Sitharaman clarified in the Rajya Sabha that India does not have ready information on the tax paid on cryptocurrency. The finance minister, while addressing the Upper House, went on to call cryptocurrency a “risky area” while addressing questions raised by several MPs during the question hour. She added that the bill will be introduced once the cabinet clears it. 

As the curiosity about the contents of the upcoming cryptocurrency arise, Nischal Shetty of Wazirx in an interview with ET NOW raised some pertinent questions like–what would be the checks & balances in place in the new bill. He also urged the government to clarify on what the industry should and should not focus on in order to continue in the crypto business.  

  Now, the Bill seeks to “prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.” It also seeks to “allow a framework for the creation of an official digital currency to be issued by the Reserve Bank of India”. 

What is a private cryptocurrency?  

In an interview with ET NOW Ajeet Khurana, Former Head, BACC said, “Private Cryptocurrencies are either coins which are privacy-oriented which can’t be tracked or based on blockchain which are controlled by central entities. Back in 2018, the govt was saying that anything not issued by the govt is a private cryptocurrency.” 

While discussing the definition of Private cryptocurrencies in the upcoming crypto Bill and the possibility of a ban he added, “I do not see the govt entering and listing cryptocurrencies that can and cannot be used. Primarily the same cryptocurrency can be used in 5 different ways so the use case can be a problem, not the cryptocurrency itself. I feel that private cryptocurrencies as defined by this bill are going to be a non -governmental cryptocurrency and I don’t see any of them getting banned. There may be disclosure requirements and use case requirements.”  

NFT’s are another growing trend these days. On having a separate framework for NFTs Finance Minister Nirmala Sitharaman said, “at this moment I may not be able to say that there will be a separate framework or not, but certainly, all these matters are being discussed.” 

Another important topic of discussion in the contents of the upcoming Cryptocurrency Bill is the ban on crypto advertisements. To this question being raised in the Rajya Sabha, Finance Minister Nirmala Sitharaman responded by saying, “The guidelines of Advertising Standards Council of India are being studied and regulations that they have are all being looked into so that, if necessary, we can take some kind of decision to say how we are going to handle this.” 

Talking about the stringent regulations to be expected Ajeet Khurana, Former Head, BACC told ET NOW that, “These stringent rules can be in two dimensions, one being on how Advertising & Marketing can be done to woo customers and on how do service providers i.e. Exchanges do KYC’s, report and disclose information.”