Crypto Asset Bill proposes to ban the use of crypto as currency

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The currency regulator will be RBI and crypto assets will be regulated by SEBI.

The Crypto Assets Bill proposes to ban the use of crypto assets as currency substitutes or as payment systems for remittances. The bill also proposes to establish an enabling framework for distributed ledger technology and to lay the groundwork for the creation of the official digital currency to be issued by the Reserve Bank of India (RBI) and regulated under RBI law, sources told NDTV.

The bill that will be presented during the winter session of Parliament also proposes to establish a regulatory framework to regulate the evolving space and ban advertisements and the dissemination of disinformation to the public in accordance with a comprehensive approach.

The bill seeks to minimize financial stability risk by appropriately separating the formal financial sector from crypto assets

As the technology underlying crypto assets is always evolving and has many uses, the bill proposes an exemption for anyone using the technology underlying any crypto asset for any lawful activity.

The bill empowers the central government to exempt certain public interest activities such as cryptocurrency mining, holding production, selling, issuing transfer, disposal or union as a means exchange, store of value and unit of account.

The bill aims to impose penalties for violations of its provisions by individuals as well as legal persons, the offenses must be recognized and not subject to bail. The regulator of the currency will be RBI and the crypto assets will be regulated by the market regulator SEBI.

The reason for the passage of the law to regulate crypto assets is that it can pose a threat to financial stability and there are no laws addressing it, sources said. The bill also proposes to ban all private cryptocurrencies in India and to facilitate regulation.

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