India plans to introduce legislation to ban cryptocurrencies

The proposed law will provide a framework for the creation of an official digital currency to be issued by the Reserve Bank of India and allow certain exceptions to promote blockchain, the underlying technology of cryptocurrency and its uses.

India plans to introduce a bill seeking to prohibit all private cryptocurrencies in the country during the budget session of parliament that began Friday.

Customers talk against a backboard with signs of cryptocurrency during 2020 Taipei International Finance Expo in Taipei, Taiwan. (REUTERS)

The proposed law will provide a framework for the creation of an official digital currency to be issued by the Reserve Bank of India and allow certain exceptions to promote blockchain, the underlying technology of cryptocurrency and its uses, according to a bulletin of the lower house of parliament.

The central bank is looking into the need for a digital version of the fiat currency and how to implement it.

India’s monetary policy regulator had in 2018 banned crypto transactions after a string of frauds in the months following Prime Minister Narendra Modi’s sudden decision to ban 80% of the nation’s currency. Cryptocurrency exchanges responded with a lawsuit in the Supreme Court in September and won respite in March 2020.