India looking to ban all Crypto except the ‘Digital Rupee’

India has been struggling to regulate cryptocurrencies. The last time the government took steps regarding crypto, it was to the ban on all regulated entities, including banks, to stop dealing with businesses or individuals in cryptocurrencies. Since then many institutions and businesses have shut shop in India and various cryptocurrency exchanges like Zebpay and Koinex have halted their operations in the country. The has been no word from the regulatory bodies since then. However, a draft bill named “Banning of Cryptocurrency & Regulation of official digital Currencies” has surfaced one the popular digital library called Scribd.

This virtual copy of the unverified Draft bill was shared by Varun Sethi, a tech lawyer based in India. The document runs 18 pages long and defines digital currencies 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 generally discusses the possible effects this bill would have on the cryptocurrency situation in India and throws some light on how virtual currencies would be regulated in the future. The draft elaborates the fact that no one would be allowed to use non-regulated cryptocurrencies as a medium of exchange, store of value, and/or unit of account; it also states that cryptocurrencies will not be accepted as a legal tender within the country.

The document reads:

“No person shall mine, generate, hold, sell, deal in, issue, transfer, dispose of or use Cryptocurrency in the territory of India.”

The bill also mentions a “Digital Rupee”, which will be issued by the Reserve Bank of India, and will be approved by the Central Government as a legal tender, whereas all other currencies satisfying the above-mentioned definition will be prohibited. The bill, however, exempts anyone using the distributed ledger technologies (DLT) or other related technologies purely for the purpose of experimentation or research. The prohibition would also not apply to the use of DLT for creating a network that provides financial or other services. This, however, doesn’t mean that cryptocurrencies can be used as a mode of payment.

Those failing to comply with the prohibition of cryptocurrencies would be subjected to a fine or imprisonment or both. The duration of the sentence would, however, be determined based on the severity of the crime and the damage caused. The Draft concludes with:

“This is the Allege Draft of the proposed Banning of Cryptocurrency and Regulation of Official digital currency bill 2019 ( India) is yet to be drafted completely and tabled in the parliament to become an Act with or without modifications.”