Economy

Bill to regulate cryptocurrencies being finalised: Thakur

Our Bureau New Delhi | Updated on February 09, 2021

Minister of State for Finance Anurag Thakur   -  PTI

Will provide framework for creating official digital currency to be issued by RBI

The Finance Ministry will soon bring a Bill to regulate cryptocurrencies in the country, the Minister of State for Finance Anurag Sigh Thakur told the Rajya Sabha on Tuesday. The Government has scheduled the Bill to be introduced during the ongoing Budget session.

The Bill has been titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’. It aims to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. It 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.

Also read: Dollar shackled by doubts over US recovery; bitcoin tops $47,000 for first time

In an oral response to a question, Thakur said regulatory bodies like the RBI and SEBI do not have any legal framework to directly regulate cryptocurrencies as they are not currencies, assets, securities or commodities issued by identifiable users. “The existing laws are inadequate to deal with the subject,” he said.

The government had formed an Inter-Ministerial Committee which has given its report on issues related to virtual currencies. There was also a meeting of the Empowered Technology Group. The Committee of Secretaries chaired by the Cabinet Secretary has also given its report. “A Bill (on crypto currencies) is being finalised and it will soon be sent to the Cabinet,” Thakur said.

Also read: Budget session: Centre to unveil a law to ban private cryptocurrencies, introduce official digital currency

In view of the risks associated with virtual currencies (VCs), including Bitcoins, the RBI, through a circular in April 2018, had advised all the entities regulated by it not to deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs. However, the Supreme Court, vide a judgment dated March 4, 2020, had set aside the RBI’s circular.

Rupee, better performing

Thakur informed the House that the rupee was one of the better performing Asian currencies in 2020. “In 2020-21, the rupee appreciated by 3.53 per cent till February 2, 2021, per the information provided by Reserve Bank of India,” Thakur said in a written reply.

He also said India enforced one of the most stringent lockdowns during April-June, 2020, compared with other key Asian countries and the contraction in Gross Domestic Product (GDP) is consistent with the effect of the stringent lockdown. “Owing to stringent lockdown measures, India was able to significantly contain the death rate from Covid-19. With gradual unlocking of the country, the economy made a significant V-shaped recovery,” he said.

LIC IPO

In a response to another question, Thakur said up to 10 per cent of the LIC IPO issue size would be reserved for policyholders. The government will remain the majority shareholder and will continue to retain management control safeguarding the interest of policyholders, he said.

“In the Finance Bill 2021-22, it has been proposed to have a reservation on a competitive basis, to an extent of up to 10 per cent of the issue size, in favour of life insurance policyholders of LIC,” Thakur said in a written reply.

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Published on February 09, 2021
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