The Finance Ministry is preparing a Cabinet note for further discussions to create a regulatory regime for an official digital currency, which will be issued by the Reserve Bank of India RBI and barring private cryptocurrencies. The obscurity of cryptocurrencies and how they can be used for terrorist funding and other illegal activities will be one of the main points of this note.
I will say that cryptocurrenciescurrenices are not going to become a legal tender. The Indian Rupee is a legal tender, while gold and silver are not legal tenders. Finance Secretary T V Somanathan told India Today that the rest will be decided.
The meeting between the Prime Minister Narendra Modi, top Finance Ministry officials and officials from the Reserve Bank of India RBI set the tone for the bill. The RBI submitted a report which underlined that there was not much knowledge about cryptocurrencies.
The central bank also highlighted that virtual currencies that don't have an underlying value can be roadblocks in managing money supply and inflation control. After the Prime Minister's meeting on November 13, RBI Governor Shaktikanta Das called for deeper, well-informed discussions on the issue of cryptocurrencies.
There is a need for deeper discussions, as the discussion is now taking place in the public domain. When the central bank says that we have serious concerns from the point of view of macroeconomic and financial stability, there are deeper issues that need to be addressed in the public space, RBI Governor Shaktikanta Das said in his address at the SBI Banking and Economics Conclave.
The Winter Session of the Parliament will be held on November 29th, 2021, for the Cryptocurrency and Regulation of Official Digital Currency Bill. The bill seeks to prohibit all private cryptocurrencies in India, but it allows for certain exceptions to promote the underlying technology and its uses. The bill will allow the creation of the official digital currency to be issued by the Reserve Bank of India. The RBI is going to start a pilot program for a central bank digital currency, CBDC, in December. The two points scrutiny on security and impact on monetary policy will be included in the testing.