Crypto Asset Bill Aims to Restrict Use of Crypto as Medium of Exchange

Story Highlights
  • Crypto Asset Bill proposes to prohibit usage of crypto assets as currency substitutes.
  • It proposes to establish a facilitative framework for distributed ledger technology.
  • It seeks to impose a penalty for contravention of its provisions by individuals.

New Delhi: The Crypto Asset Bill intends to make it illegal to use crypto assets as currency replacements or remittance payment systems. The law also lays the basis for the formation of an official digital currency to be issued by the Reserve Bank of India (RBI) and regulated under the RBI Act.

It proposes to impose a penalty for persons and corporations that violate its provisions; the offences will be cognizable and non-bailable. The RBI would be in charge of currency regulation, while market regulator SEBI will be in charge of digital assets. Because the technology that underpins crypto assets is continually growing and has a wide range of applications, the bill provides an exception for anybody who utilises the technology for any legitimate purpose. The law gives the government the authority to exclude certain operations that are in the public interest, such as crypto mining, creating, holding, selling, trading in issuing transfer, disposing of, or merging it as a medium of exchange, store of value, or unit of account.

According to a Cabinet note published by the administration, the proposed cryptocurrency bill suggests regulating private cryptocurrencies rather than outright prohibiting it. As of now , cryptocurrency is not yet recognised as legal tender in India. 

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