Bitcoin to be banned, India to introduce its own 'digital currency as government lists bill in a parliament

India is all set to ban all private cryptocurrencies such as Bitcoin, Ether, Ripple among others.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, seeks to create a “facilitative framework” for an official digital currency that will be issued by the Reserve Bank of India (RBI).

It might exempt certain uses and the promotion of the underlying technology of such tenders.

In 2018, the Indian central bank had banned crypto transactions after a number of frauds came to the fore following PM Modi's decision to ban 80% of the nation’s currency.

As a result, the Cryptocurrency trade was brought to a halt after the RBI asked all regulated entities, such as banks, to stop any dealings related to private cryptocurrencies as part of that order.

“Private digital currencies have gained popularity in recent years," the central bank booklet said.

“In India, the regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks. Nevertheless, RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and, in case there is, how to operationalize it," it noted.

A previous RBI ban on the use of bank channels for payments associated with cryptocurrency issued in 2018 was overturned by the Supreme Court in March 2020 creating a vacuum in the regulation of cryptocurrency in India.