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India Taking a Step Towards CBDC After the Debut of its Blockchain-Based Payment System Vajra?

India has been taking multiple stances when it comes to blockchain and cryptocurrencies, as cryptocurrency has not been deemed legal, but not considered illegal either. The National Payments Corporation of India (NPCI) recently designed and adopted a blockchain-based system for automating payment clearing and settlement processes.

Earlier this year, the Bank for International Settlements (BIS) published a report stating that over 70% of central banks were exploring central bank digital currencies (CBDCs). The Reserve Bank of India (RBI) said that it would be investigating the issuance of a CBDC. The central bank has created a group to examine the potential of a rupee-backed digital currency. Since the emergence of private digital tokens, the aim of issuing a CBDC is to reduce the costs of creating paper and metallic money.

Shaktikanta Das, the central bank governor, revealed the central bank had held discussions with other governments and central banks regarding CBDCs. “It is very early to speak on a central bank issuing digital currencies. Some discussions are going on. Technology has not yet fully evolved. It is still in the very nascent stage of discussions, and at RBI, we have examined it internally,” he added.

‘Too early’ for CBDCs

However, the Indian government considers the trading and issuance of cryptocurrencies illegal in the nation.

Das said it was ‘too early’ to talk about a CBDC, as technology has not matured enough. Das made it clear that the central bank is entirely against private digital currencies, as he believes that the sovereign has the right over this function.

Shaktikanta Das, Governor of the Reserve Bank of India. Image via Bloomberg

“The world over, central banks and governments are against private digital currency because currency issuance is a sovereign function, and it has to be done by the sovereign,” he explained. “As and when the technology evolves with adequate safeguards, I think it is an area where the Reserve Bank will certainly look at seriously at an appropriate time.”

The blockchain-based payment system, Vajra

Although the Indian government is still skeptical about the use of cryptocurrency, the National Payment Corporation of India (NPCI) officially announced its permissioned blockchain-based platform, Vajra, to make payment processes more efficient and transparent.

As a permissioned blockchain-based platform, only registered parties under the network administrator are allowed to be part of the blockchain network. The three types of nodes on the platform consists of:

1) Clearing House Node, which has the administrative rights to the platform and is directed by the NPCI. It also has the right to add a new node on the platform.

2) Notary Node, which validates transactions only of the Aadhar biometric, is used for the authentication process, receiving transactions only from the clearing house node.

3) Participant Node, which is represented by the banks, and has the ability to post, receive, and view transactions.

The NPCI highlighted some of the key benefits of blockchain, stating that the distributed ledger technology will help the payment industry with higher resilience, and efficiencies through automation and transparency. The NPCI said, “DLT is an incorruptible decentralized ledger that not only provides a transaction medium but also acts as a repository for all transactions in hashed digital packets called blocks. The availability of transaction in the distributed ledger will reduce reconciliation steps and also increase transparency among participants.”

The platform allows for a system of self-executing contracts under the rules of the smart contracts. The Vajra platform aims to ensure zero to minimal processing time and efficiency for dispute resolution.

Unfriendly towards cryptocurrency?

In April 2018, the Reserve Bank of India banned financial institutions from providing services to crypto firms, including exchanges, which put them out of business. The ban was effective in July 2018, although several crypto industry stakeholders filed writ petitions with the supreme court to challenge the ban. The court has been scheduled to resume the hearing on Jan. 14.

The bill drafted by the interministerial committee (IMC) reflected on Das’ statements. Subhash Chandra Garg, the former head of the Secretary of the Department of Economic Affairs, submitted the draft bill entitled “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” to the Ministry of Finance in February 2019.

Image via Shutterstock

However, the draft bill has a section on CBDC and its proposed legal framework. The IMC advised of an open mind when introducing an official digital currency in India.

The IMC recommended the government, “In consultation with the Central Board of the Reserve Bank, may approve [the] digital rupee to be legal tender with effect from such date and to such extent as may be specified.” There were reports of the Indian government considering issuing a state-run digital currency called Lakshmi in 2017.

The RBI also stated to have considered the potential launch of its own centrally controlled cryptocurrency. Deputy Governor, BP Kanugo, said, “RBI will produce a report, and they will explore the feasibility and desirability of issuing a digital currency by the central bank. These are issued by central banks; they constitute the liability of the central bank, and they will be in circulation in addition to the paper currency. It also holds the promise of reducing the cost of printing of the notes.”

The Income Tax Department of India has also been secretly training its officials to look into cryptocurrencies. As cryptocurrencies have been seen as a gray area for the Indian community, the Income Tax Department sent notices to various cryptocurrency investors. Crypto investors were previously doubtful of how to show their investments in their tax returns.

Blockchain adoption in India

Blockchain adoption in India has been increasing as officials in the country are trying to put together a regulatory framework to govern the technology. The Minister of State for Electronics and IT (MeitY), Sanjay Dhotre, said that a strategy is currently being put together by regulators to research into blockchain applications in the financial industry, cybersecurity, and government agencies since November 2019.

The country has been using blockchain in its renewable energy sector, with the blockchain-based energy trading platform Power Ledger pioneering in the industry.

Image source: Shutterstock

India’s Supreme Court Turned the Tables on Crypto Ban in Landmark Ruling

In a momentous ruling, India’s Supreme Court has lifted the ban made by the Reserve Bank of India (RBI), the nation’s central bank, on banks and other regulated entities dealing with cryptocurrencies. As reported on March 4, the court noted that preventing regulated entities from offering banking services to crypto trading stakeholders did not hold any water.

RBI’s biased decision

In April 2018, RBI made a controversial decision to impose a blanket ban on regulated financial institutions from dealing with crypto businesses. Three months later, crypto exchanges found themselves on the receiving end as banks had to close their accounts and this thwarted crypto adoption in India.

Nevertheless, relevant stakeholders in the crypto sector did not throw in the towel as they were ready for a legal battle, as evidenced by both industry and public-led petitions. In January 2020, a breakthrough seemed imminent as the Internet & Mobile Association of India (IAMAI) filed an appeal before the Supreme Court challenging the RBI’s crypto ban decision.

Interestingly, RBI had responded by stating that cryptocurrencies, such as Bitcoin and Ethereum, had not been banned as its resolution was pegged on highlighting the risks linked to crypto trading to regulated entities like banks.

The court ascertained, “When the consistent stand of RBI is that they have not banned VCs and when the government of India is unable to take a call despite several committees coming up with several proposals including two draft bills, both of which advocated exactly opposite positions, it is not possible for us to hold that the impugned measure is proportionate.”

The Supreme Court judges handling the case noted that the RBI’s decision was not appropriate.

India’s appetite for blockchain

India is continuously positioning itself as one of the preferred blockchain hubs globally. For instance, according to LinkedIn’s 2020 Emerging Jobs Report, sought after positions such as blockchain developers, have skyrocketed to unprecedented levels in India.

It is also speculated that Kerala, a southwestern Indian state, will churn out 20,000 blockchain experts by 2021. With crypto trading getting the green light from the Supreme Court, crypto adoption in India is now guaranteed without fear of contradiction.

Image via Shutterstock

Tim Draper Plans to Capitalize on Indian Cryptocurrency Renaissance

Tim Draper is a billionaire investor best known to the crypto community for his participation in the FBI’s 2014 Silk road auctions where he won thousands of Bitcoin.

Draper now appears to have set his sights on being a ground floor investor in India’s emerging cryptocurrency industry.

In an interview on March 21, the venture capitalist revealed that he had met with several Indian Bitcoin and crypto start up businesses on a recent visit to the nation and that he, “hopes to be able to fund a number of them.”

Supreme Court Reverses Crypto Ban

On March 4, India’s Supreme Court reversed the ban imposed by the Reserve Bank of India (RBI), the nation’s central bank, on banks and other regulated entities dealing with cryptocurrencies. Draper called the development a ‘renaissance’ for the country’s cryptocurrency sector in a tweet on March 22 and believes the current global financial crisis will help reveal the advantages of cryptocurrency.

Draper said in his interview, “The Supreme Court of India and the Indian government have shown that the best ideas ultimately prevail, and just in time, because the benefits of Bitcoin and crypto over current systems will become apparent during this crisis.”

Supreme Court Reversal Could Be Reversed

Due to the ban from the RBI, several cryptocurrency platforms that have moved their operations to other jurisdictions such as Singapore, are now planning to move back to India. Banks can also allow customers to link their bank accounts to cryptocurrency platforms, enabling trading.

However, since the crypto ban’s reversal it has been revealed that the Reserve Bank of India (RBI) has planned to report a review petition and appeal the recent Supreme Court’s cryptocurrency ruling.

The review petition from the nation’s central bank arose from concerns of the apex court’s decision that could pave the way for trading in cryptocurrencies and put the banking system at risk.

Image via JD Lasica

Reserve Bank of India Says Banks Are Authorized to Provide Accounts to Cryptocurrency Traders

The Reserve Bank of India (RBI) has recently confirmed that there is no banking ban on the cryptocurrency industry. The banking regulator was responding to a Right to Information (RTI) query.

The co-founder of Unocoin cryptocurrency exchange, B.V. Harish filed the RTI query on April 25. He asked whether the Central Bank has prohibited local banks from providing the bank accounts for crypto traders, crypto exchanges, or cryptocurrency companies. On May 22, the banking regulator replied: “As on date, no such prohibition exists.”

Crypto Businesses May Still Face Regulatory Hurdles

In March, the Supreme Court of India overturned the Central Bank’s circular that banned banks from providing services to any business or anyone dealing with cryptocurrencies. In April 2018, India’s Central Bank directed all entities regulated under it not to deal with digital currencies or provide services to facilitate any entity or person from settling or dealing with the same. The Supreme Court termed such directive as illegal. After the Supreme Court ruling, crypto exchanges started bringing bank support after about two years without it.

However, several banks are reported to still refuse opening accounts for cryptocurrency exchanges. Banks claim that they are waiting for further instructions from the Central Bank regarding cryptocurrency. In the recent past, Harish said that banks have been claiming that they need RBI circulars specifying that there are no more restrictions for them to provide bank accounts for cryptocurrency businesses.

BV Harish filed an RTI query because of concerns faced by traders who claimed that banks continued imposing restrictions on cryptocurrency trade despite recent ruling made by the Supreme Court.

Harish said: “Bankers have been saying that they need new RBI circulars mentioning that there are no more restrictions for them to provide bank accounts for crypto businesses. Now, we have received a positive response from the RBI.”

After the Supreme Court lifted the bank restriction, many crypto exchanges started seeing 10x trading volumes and a significant rise in new users. Despite the extended countrywide lockdown, the crypto industry is booming. P2P (peer-to-peer) marketplaces for Bitcoin are growing in the country, new investments are flowing in, and new cryptocurrency exchanges are launching.

Meanwhile, India’s government is reported to still hold discussion on whether to regulate cryptocurrency. But the process has been delayed because of the COVID-19 pandemic and the countrywide lockdown. In March, reports indicated that India’s government was engaging in discussions of ways to regulate cryptocurrencies with the Central Bank.

Crypto Exchanges Seek Clarity on Legal Status and Taxability from The Central Bank

Earlier this month, cryptocurrency exchanges in India were seeking tax status and regulatory clarity from the Central Bank following the Supreme Court ruling that favored the crypto industry earlier this year. Crypto firms and exchanges were seeking clarification concerning the nature of their operations. Several cryptocurrency exchanges wrote to the Central Bank to need clarification concerning their status as banks continue to deny banking services to them due to a lack of clarity from the Central Bank. They claimed that the lack of clarity on taxation has allowed banks to continue delaying services to crypto exchanges.

Moreover, the cryptocurrency exchanges demanded clarification regarding whether they are being classified as goods, commodities, currency, or services as would impact the manner in which they get taxed under the Goods and Services Tax (GST) framework. Praveenkumar Vijayakumar, the chairman and CEO of cryptocurrency exchange Belfrics Global said that if India’s crypto exchanges would pay GST on the whole transaction, then most of these platforms would not be able to survive. However, it remains to see how things would unfold in the crypto industry.

Image via Shutterstock

Bitcoin and Libra’s Ultimate Underlying Value to be Determined by Central Banks, says Ex-RBI Governor

Former Indian central bank governor Raghuram Rajan said that Bitcoin and Facebook’s Libra could play a role in a world where central banks are issuing their own digital currencies.

Bitcoin has come a long way in its acceptance, with the coronavirus pandemic becoming a possible catalyst for its global adoption. Some institutional players have finally seen Bitcoin for what it’s worth, including the recent $250 million investment in Bitcoin by MicroStrategy.

Libra was introduced a year ago by Facebook and has received endless regulatory backlash due to the firm’s involvement in data privacy scandals including Cambridge Analytica. Libra was introduced as a global payment service platform, mitigating the inefficiencies of the current payment industry, and allowing billions of people to have access to financial infrastructure and payments. Facebook’s idea of Libra was for it to become a stablecoin, which would be backed by a basket of global currencies, enabling a stable value.

Although the world has not fully opened up to the idea of Bitcoin and Libra being an integral part of the future of the financial system, central banks have warmed up to creating their own digital currencies. Since the emergence of Libra, China has been developing its own central bank digital currency (CBDC), also known as the digital currency electronic payment (DCEP). The Bank of France is also experimenting with its own CBDC.

The former governor of the Reserve Bank of India said that Bitcoin and Libra could have a place when central banks also enter into the digital currency era. Rajan said in CNBC’s podcast:

“I would like to think that these private currencies are also in competition with the central bank digital currency.”

Rajan added that Bitcoin is a “speculative asset,” meaning that investors have shown interest in Bitcoin when traditional assets including bonds are less attractive. He explained:

“In that sense, Bitcoin is a little bit like gold, in fact, gold has some value because we value it for jewelry, but bitcoin you can’t even do that. Nevertheless, it has value because others think it has value.”

On the contrary, he supported Libra, saying, “On the other hand, Libra is an attempt to create a currency which is used for transacting. And that, the whole idea is not to hold it as a speculative asset which increases in value … but use it for transactions. So the ultimate underlying value is going to be from the central banks, they’re going to preserve the value, not of Libra but of what Libra can be exchanged into.”

Rajan’s comments may seem ironic for the cryptocurrency community, as the idea of Bitcoin at least, was for the redundancy of third parties including authorities.

Rajan believes that having a private digital currency that had the features of a “monopoly” would be problematic, but there will still be competing private digital currencies with different roles.

He concluded, “So the bottom line I think is different private currencies will do different things and it may be bitcoin has value going forward just as a store of value, or as a speculative asset. While Libra may be the kind of currency which is used more for transacting.”

Binance’s take on Libra

The Libra Association recently applied to the Swiss Financial Market Supervisory Authority (FINMA) for a payment system license. Binance commented that such a payment system is likely to be “systemically important.” With the addition of a payment system license, Libra would be more accessible to the public.

Binance added, “Libra’s envisioned global payment system could do to the payment industry what SpaceX did to the space industry: shake the foundations of a well-established sector with high entry barriers.

India Plans to Ban Private Cryptos like Bitcoin in Favor of National Cryptocurrency

The government of India plans to introduce a legislation in the country’s lower house that would ban private cryptocurrencies like Bitcoin and instead establish a national cryptocurrency.

The lower house of India’s parliament (Lok Sabha) is set to hold a session to lead the ban of private cryptocurrencies while creating a framework for the establishment of an official digital currency to be issued by the country’s Central Bank (the Reserve Bank of India).

The Lok Sabha bulletin, released on Friday, January 29, revealed that one of the aims of the bill is to ban all private cryptocurrencies in the country while providing some exceptions to promote the underlying technology, blockchain.

Due to the recent increase in crypto adoption and trading in the country, the government seeks to ensure that local investors are not exposed to risks.

Apart from that, there are fears that crypto assets are being utilized for money laundering in the absence of any KYC standards. Some of the cryptocurrency exchanges operating in the nation had recently created measures related to KYC.

The proposed bill banning cryptocurrency has already made the crypto industry worrying. Shivam Thakral, CEO of BuyUcoin, the second-largest crypto exchange in India, said:

“We urge the government to take the opinion of all the stakeholders before taking a decision, which may affect the livelihood of the entire workforce employed in digital asset industry in India. We will engage with our peers and other stakeholders to work towards protecting the interest of the industry.”

Rahul Pagidipati, the CEO of Zebpay crypto exchange, said:

“Its (the bill’s) success will depend on the details, particularly the definition of what the bill calls ‘private cryptocurrencies.’

This is not a common term. Bitcoin is not privately owned by anyone. It is a public good, like the internet. Bitcoin and most crypto assets are more like gold and not an alternative to government-issued legal tender. Crypto assets and digital government currency can coexist and together, they can bring tremendous benefits to the Indian economy.”

Crypto’s Uncertain Future in India

However, this is not the first time that India’s lawmakers have taken such a strong stance on cryptocurrencies. In 2018, an Indian government committee headed by economic affair secretary SC Garg with officials from the Securities and Exchange Board (SEBI) and the Reserve Bank of India (RBI) as its members recommended a ban on private cryptocurrencies through a bill, though suggested that blockchain technology be utilized in financial services for better fraud detection, insurance claims management, and loan tracking.

During that same year, the committee suggested the government to examine a digital version of India’s fiat currency and ways to implement it.

So, the current bill is seen as a continuation of the recommendation of the committee led by then economic affair secretary SC Garg.

In 2018, RBI stated that the move to ban all cryptocurrencies was necessary to curb “ring-fencing” of the nation’s financial system. The Central Bank further claimed that cryptocurrencies like Bitcoin cannot be treated as currencies since they don’t exist in physical form or are not made of metal and not stamped by the government. The Central Bank eventually banned cryptocurrency transactions following cases of fraudulent activities witnessed during that year. However, India’s Supreme Court overturned the ban in March 2020, which was a big win for the local crypto enthusiasts and the victory saw a sharp rise in cryptocurrency trading volumes in the country.

The Reserve Bank of India Clarifies Stance About Crypto Ban

The Reserve Bank of India (RBI) clarified its position concerning the previous ban on cryptocurrency-related activities in the country and the adherence of financial institutions to the rule.

The latest circular from the RBI quoted a 2018 memo in which the RBI declared a clampdown on crypto based on the Supreme Court’s directive. The RBI now claims that the older circular can no longer be referenced as it is no more valid based on the date discrepancies.

The new memo was specifically directed to the banks, financial institutions, and other regulated entities that withheld their crypto investors’ services while citing the RBI. Per this new development, the apex bank claims such references are no longer valid, and the older memo cannot be cited or quoted from.

The subject of privacy concerns and its potential use in financing terrorism is an unending topic amongst money regulators worldwide. While the RBI appears to have softened its stance per crypto transactions, the bank still wants maximal compliance measures to be applied to Know-Your-Customer (KYC) and other related measures. Per the memo, the RBI advised that banks may conduct the following activities:

“Continue to carry out customer due diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.”

The move from the RBI comes after the global cryptocurrency industry started experiencing a downturn and a broad market correction. The ongoing bearish turn was sparked when Elon Musk’s criticism of Bitcoin mining and its energy usage rent the air. This was further compounded by the Chinese clampdown on crypto activities and miners alike. The RBI’s move may lend some succour to the global crypto market when it needs all positive news to retrace the current trend.

India May Imposes 2% "Equalization Levy" on Offshore Crypto Exchanges

India intends to impose a 2% “equalization levy” on investors on cryptocurrency trading transactions from offshore exchanges that provide services to the Indian market, citing the local media sources.

Per a report in the Economic Times on Tuesday, investors may burden extra cost by paying a 2% tax on the settlement price of cryptocurrencies purchased from overseas cryptocurrency exchanges operating in India.

Girish Vanvari, the founder of tax advisory firm Transaction Square, told Economic Times that:

“The levy is on the selling price and companies may be required to add this to the cost of the crypto assets.”

The issue of cryptocurrency regulation has always been a controversial topic in India. Taxation imposing on cryptocurrency transactions may also face a series of challenges in practice. Amit Maheshwari, a tax partner at tax consulting firm AKM Global, believes that it will be complex for the Indian government to levy this 2% equilibrium tax before a fully encrypted asset regulator has been established.

He added that:

“In the absence of any guidelines on the treatment of crypto-assets, there is ambiguity in how these would be treated under the tax laws and FEMA (Foreign Exchange Management Act).”

The Indian government has remained a skeptical attitude towards cryptocurrencies for a long time.

The authority was considering three key aspects to review crypto-related bills recently—the first two around whether new rules can be enacted to accommodate cryptocurrencies. The authorities are trying to explore which areas or types of crypto-related activities to permit or ban entirely.

As early as 2018, The Reserve Bank of India (RBI) declared a clampdown on crypto based on the Supreme Court’s directive. However, the RBI now claims that the older circular can no longer be referenced as it is no more valid based on the date discrepancies.

Indian Payment Giant Paytm May Add Crypto Services if Regulations Improves

Indian payment unicorn Paytm has reiterated its willingness to add Bitcoin and crypto-related services if regulations around the nascent asset class become clearer.

Noting that the rules surrounding the existence of Bitcoin and the tons of altcoins around today are largely unclear, the company’s Chief Financial Officer Madhur Deora said in a Bloomberg TV interview that the digital currency-focused regulations are still a “grey area” in India today.

The company’s executive noted that adding support for Bitcoin will not be a difficult adjustment if and when the premier digital currency becomes a legal asset or financial product in the country.

“Bitcoin is still in a regulatory grey area if not a regulatory ban in India,” Deora said. “At the moment, Paytm does not do Bitcoin. If it was ever to become fully legal in the country, then clearly there could be offerings we could launch.”

A series of Bitcoin banning scares remains in the Indian crypto ecosystem all year long. While Bitcoin and crypto-related trading is becoming a regular engagement amongst a certain number of citizens. Thanks to the Supreme court’s upturn of a ban on Bitcoin back in March 2020, financial services providers are still not completely at ease to offer crypto services to traders.

The Reserve Bank of India notably has its eyes on developing a Central Bank Digital Currency (CBDC). The incessant clamour to ban or restrict Bitcoin trading mimics a related crackdown on the premier digital coin by the Chinese government this year. The likelihood of a ban may be hinged on stumping any form of competition that a government-backed digital currency may wield. However, both China and India are sovereign nations, and what is obtainable in one does not necessarily reflect what might be recorded in the other.

Despite the step in from the apex court, outfits like Paytm still prefer to err on the side of caution in order not to incur the wrath of the law in the near future.

RBI Says India Will Initially Go for Basic Model For CBDC

As India struggles with how to regulate cryptocurrencies, the country’s central bank announced fresh plans to introduce a basic CBDC initially before implementing a more sophisticated version.

On December 28, the Reserve Bank of India released a report called “Trend and Progress of Banking in India 2020-21″, and further elaborated on the regulator’s plan of a Central Bank Digital Currency.

The report states, “in its basic form, a central bank digital currency (CBDC), provides a safe, robust and convenient alternative to physical cash. In comparison with existing forms of money, it can offer benefits to users in terms of liquidity, scalability, acceptance, ease of transactions with anonymity and faster settlement.”

The central bank is considering how to implement a CBDC in phases and its initial recommendation focuses on “adopting basic models initially, and test comprehensively so that they have minimal impact on monetary policy and the banking system.”

Given the dynamic impact of a CBDC on macroeconomic policymaking, the report stated that “it is necessary for the CBDC to adopt a basic model initially, and test comprehensively so as it has minimal impact on monetary policy and the banking system.” The report further mentioned that the existing payment system architecture would be used to provide a useful backbone to make a state-of-the-art CBDC available to its citizens and financial institutions.

The report also raised questions about many aspects of CBDCs, including design elements that should be navigated before the central bank introduces a CBDC. The design elements include examining the rollout and navigating whether the national digital currency would serve a general purpose and be available for retail use or whether it would be for wholesale use.

The RBI’s deputy governor, T Rabi Shankar, said that the central bank is working to roll out two types of CBDCs (wholesale and retail) and further stated that the regulator has done a lot of work on the wholesale CBDC but the approval of the retail-based CBDC is more complicated and would take some more time. He stated that currently the wholesale CBDC is ready and would be released for pilot testing.

India Favors Partial Ban on Crypto

Last month, India’s government was making preparations to ban private crypto coins and to allow the country’s central bank to launch an official digital currency. The proposed legislation follows a massive crypto crackdown in China where the central bank and financial regulators have made all cryptocurrency transactions illegal.

In the winter session of the parliament which started on November 29, India’s lawmakers discussed the proposed legislation titled “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021”.

The bill however appeared to leave some room for crypto use. While the bill intends to prohibit all private crypto assets, it allows some exceptions to promote the underlying technology of cryptocurrency and its uses. On the first day of the winter session of the parliament, the government obtained several questions concerning the looming ban of crypto assets and the RBI’s plans to launch an official digital currency.

In August, RBI governor Shaktikanta Das revealed that pilot tests for the introduction of the official digital currency would likely start in December 2021.