New Delhi: With the winter session of the parliament kick-started on a stormy note on Monday, the government is all set to introduce the much-awaited ‘Cryptocurrency and Regulation of Official Digital Currency Bill 2021’ in the ongoing session. Union finance minister Nirmala Sitharaman while addressing the parliament on the second day of the winter session directed towards the introduction of a bill on the regulation of Cryptocurrency.
The finance minister while replying during the Question Hour in Lok Sabha on Tuesday said, “This is a risky area and is not in a complete regulatory framework. No decision was taken on banning its advertisements. Steps are being taken to create awareness through RBI and SEBI. The government will soon introduce a bill.”
In fact, on Day 1 of the ongoing session, Sitharaman on Monday said that the government has no proposal to recognise Bitcoin as a currency in the country. Straightforwardly replying with a ‘NO’, the finance minister said that the government has no proposal to recognise Bitcoin as a currency and is currently planning to introduce a cryptocurrency regulation bill in the House after its approval from the Cabinet.
On being asked whether the government is aware of the cryptocurrencies that are traded in India and whether trading in cryptocurrency is legally permitted in India, Sitharaman replied that the Centre does not collect any data on Bitcoin transactions in the country.
The new bill that the government is planning to introduce seeks to ban all but a few private cryptocurrencies to promote underlying technologies while allowing an official digital currency by the Reserve Bank of India.
Cryptocurrency and Regulation of Official Digital Currency Bill 2021:
The Cryptocurrency and Regulation of Official Digital Currency Bill 2021, which is listed in the ongoing winter session of parliament, seeks to prohibit all private cryptocurrencies in India, with fewer exceptions to promote the underlying technology of cryptocurrencies and its uses.
The bill seeks to “create a facilitative framework for the creation of the official digital currency to be issued by RBI”.
Earlier in the year, the government had a strong stance against cryptocurrencies in the country and it was also assumed that the Central government can even impose a blanket ban on the use of decentralised digital money.
A look at other countries stance:
Last week, when the government released the list of the bills that will be presented in the winter session of parliament, the bill titled ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ was received as a bomb on crypto enthusiasts.
Since then, many are waiting for the announcement of the bill so that all the speculations could come to an end and the future of cryptocurrencies can be defined in India. However, since the government is about to introduce a bill on the regulation of cryptocurrencies in the country, it becomes important to have a look at the countries that adopted a crypto-friendly response and those that have banned this decentralised digital money.
Countries with a crypto-friendly stance:
El Salvador: El Salvador became the first country in the world to officially classify Bitcoin as a legal currency. The Bitcoin Law was approved by Congress with a majority of 62 out of 84 possible votes.
Canada: Canada has a crypto-friendly stance but at the same time, the country also ensures that cryptocurrency is not used for money laundering. Bitcoin is viewed as a commodity by the Canada Revenue Agency (CRA).
Finland: Central Board of Taxes (CBT) of Finland has given bitcoin a VAT exempt status by classifying it as a financial service. Interestingly, Bitcoin is treated as a commodity in Finland, but not as a currency.
Belgium: The Federal Public Service Finance of Belgium has also made bitcoin exempt from VAT.
United Kingdom: UK has pro-Bitcoin stance and wants the regulatory environment to be supportive of the digital currency. The Bank of England and the Treasury in April this year announced they are setting up a task force to explore the possibility of a central bank digital currency. However, no decision has been taken on whether to have such a currency in the UK.
Countries that have restricted cryptocurrencies:
China: China imposed a total cryptocurrency ban in September 2021, when the government made crypto mining and crypto transactions illegal.
Algeria: The North African country of Algeria saw a total ban on crypto in 2018.
Nepal: Nepal too made the mining and trading of cryptocurrency illegal in 2019 under the Foreign Exchange Act.
Vietnam: Cryptocurrency isn’t outright banned in Vietnam, but an individual cannot use any form of cryptocurrency (be it Bitcoin, Ether, etc.) to make purchases. However, the mining of cryptocurrency and the use of blockchain technology is still legal.
Russia: Russia doesn’t have a direct ban on the use of cryptocurrency, but using it as a payment method is currently illegal in the country.
Bangladesh: Currently, Bangladesh does not allow cryptocurrency trading, as it goes against the country’s financial regulations and laws.
Egypt: Cryptocurrency isn’t outright banned in Egypt, its religious law prohibits its use.
Turkey: In April 2021, the Turkish government banned the use of cryptocurrency as a payment method due to its associated risks.