India lawmakers to review bill banning digital currency

India’s national government is reportedly reviewing the bill that would ban digital currency in the country, in what could spell a last minute change of direction to the laws around the local digital currency sector.

Working alongside sectoral regulators and other stakeholders, the government is considering whether or not a total ban should be brought into force, Bloomberg Quint reported. If not, the next matter under consideration is how digital currency might be regulated in the country, and which specific actions with digital currency should be encouraged or discouraged by the government.

The proposed law, known officially as the Cryptocurrency and Regulation of Official Digital Currency Bill, was finally brought before parliament earlier this year. However, the government failed to progress with the bill, and is now engaged in a clause-by-clause deliberation, which is expected to push the legislative process into the following parliamentary session.

There has even been the suggestion that the government could convene a new committee of experts to consider the proposals, the second such committee to have been constituted since the bill was first proposed.

The developments are the latest twist in the ongoing saga of digital currency legislation in India, which has seen various contradictory moves from regulators and government authorities in recent years.

Back in 2018, the Reserve Bank of India issued a de facto ban on digital currency businesses, by ruling that banks were not allowed to serve clients operating in the sector. This was later overturned by the Supreme Court in 2020, before the RBI attempted to issue another, informal position statement to the same effect.

With the long heralded ban on digital currency now apparently back up for discussion, it remains to be seen which direction lawmakers will choose. For the digital currency industry in India, the anxious wait for a resolution to the years-old issues looks set to continue.

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