Cryptocurrency Bill 2021: Ministry preparing Cabinet note for deliberating over official digital currency

Cryptocurrency Bill 2021: Ministry preparing Cabinet note for deliberating over official digital currency
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Finance Ministry is in the process of preparing a Cabinet note discussion on official digital currency.

It will come as a regulatory regime for an official digital currency which will be issued by the Reserve Bank of India RBI; barring the private cryptocurrencies.

But the obscurity remains over the regulation of cryptocurrencies; these can be used for terror funding and other illegal activities.

The meeting that took place between PM Modi, top Finance Ministry officials and RBI officials has set the tone for the cryptocurrency bill.

During the meet, the Central Bank submitted a report underlining the fact that there is not much knowledge about cryptocurrency.

RBI has also underscored the fact that virtual currencies that do not have an underlying value are subject to extreme fluctuations. Moreover, these can prove to be roadblocks in managing the money supply and inflation control.

After the November 13 meeting, RBI Governor Shaktikanta Das called for a deeper, well-informed discussion on the issue of cryptocurrency.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 will also be discussed in the Winter Session. It (Parliament’s) winter session is starting on November 29.

This bill seeks to prohibit all private cryptocurrencies in India. But it will allow for certain exceptions to promote the underlying technology and its uses.

This bill also allows a facilitative framework for the creation of the official digital currency to be issued by the central bank.

The Reserve Bank of India is all set to begin a pilot programme for a central bank digital currency (CBDC) in December.

The testing will have two points – scrutiny on security and impact on monetary policy.

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