The Parliament of India is expected to take up The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for consideration in the winter session which commences today (November 29, 2021). There has been confusion and uncertainty in the crypto sector in India as the wording of the description of the cryptocurrency bill seems quite ambiguous. The description of the Bill as published in the legislative business list in the Lok Sabha reads as – “To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”
The text has prima facie reiterated the Government’s intention to ban ‘private cryptocurrencies’ (as was the case with the bill introduced by the Government in the past). However, there are contrasting opinions as to what the government means and how it interprets the term ‘private cryptocurrency’.
While we await clarity on this aspect, it has been reported that Singapore-based virtual currency exchange Coinstore has begun its operations in India. Reportedly, Coinstore has launched its web platform and mobile applications, and has also planned for opening of branches in various Indian cities (including Bangalore, New Delhi and Mumbai). A representative of Coinstore has stated that while “there have been policy flip-flops but we hope things are going to be positive and we are optimistic that the Indian government will come out with a healthy framework for cryptocurrencies.” Coinstore is the second global cryptocurrency exchange to have entered into India after CrossTower which had launched a local unit earlier this year.
On the other hand, there has also been speculation that the Government is planning to discourage cryptocurrency trading by imposing hefty capital gains and other taxes. It’ll be interesting to see how and to what extend the Government intends to legitimize and regulate the trading of cryptocurrencies in India.