According to an unverified document that is allegedly the Draft legislation for cryptocurrency by the Indian regulators, the government will impose a ban on cryptocurrency use in the country.
The document was published to Scribd by tech lawyer Varun Sethi on July 15 appears and has been circulating on social media by local blockchain legal experts. Entitled as “Banning of Cryptocurrency & Regulation of Official Digital Currencies,” the alleged bill will not be purportedly debated during the 2019 Monsoon session of the Indian parliament, as per one local crypto industry figure.
18 pages long, the document elaborates the definition of cryptocurrencies as “any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value.”
The document further notes that such such currencies’ are used in exchange, as a store of account or value, and includes their use in financial transactions as well as investment schemes.
The bill suggests that a “Digital Rupee” — digitally issued by the country’s Reserve Bank, will be approved by the Central Government as legal tender and all currencies falling under the aforementioned cryptocurrency would be comprehensively prohibited. The document reads:
“No person shall mine, generate, hold, sell, deal in, issue, transfer, dispose of or use Cryptocurrency in the territory of India.”
Notably, the proposed prohibition will not apply to everyone using distributed ledger technologies (DLT) or other related technologies. People could use them for experimental or research purposes including educational contexts. The prohibition also exempts the use of DLT for creating a network that delivers financial or other services, or for other means of value creation.
The above exemption is provided that no cryptocurrencies are involved for transacting payments. The penalty for violating the prohibition on cryptocurrencies, excluding the Digital Rupee, would be either a fine or up to ten years’ imprisonment, or both.
Reportedly, the Reserve Bank of India (RBI) is developing a blockchain platform for banking in its R&D branch. It was reported at the start of this year that it has paused its plans to issue its own central bank digital currency. Under the circumstance of purported ban and the country’s long history of crypto-adversarial actions, Facebook is allegedly withhelding from applying to RBI for approval for its forthcoming Libra token.
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