No involvement in draft bill proposing crypto ban, Reserve Bank of India states

  • The Reserve Bank of India (RBI) was not in contact with governmental agencies during the legislative process.
  • The bill in question states that dealing with cryptocurrencies can lead to imprisonment of up to 10 years.

The Reserve Bank of India has denied any involvement in the controversial draft bill which could lead to ten years of imprisonment for dealing with cryptocurrencies. Varun Sethi, a lawyer specializing in blockchain,  lodged an inquiry into the RBI’s involvement with “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019″ draft after a report from the Economic Times. The legislation would ban crypto trading and issuance of all types of cryptocurrencies.

Bank officials reported that the RBI was neither in contact with governmental agencies during the legislative process nor did they receive a copy of the bill. The bank presented several of Sethi’s queries to the Department for Economic Affairs as well as the Ministry of Finance, including, “What are ‘official digital currencies’ as per the RBI?” 

The bank has been associated in cryptocurrency legislation as recently as April when the organization disclosed a regulatory sandbox which will permit blockchain products to be tested on selected consumers. The organization has not authorized a full ban on cryptocurrencies in the past. Indian Prime Minister Narendra Modi established a panel back in November 2017 to study how to regulate the crypto sector.

The Economic Times reported that a committee in support of a total ban, including representatives of the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC), among others was “of the view that already there is a lot of delay in taking action against cryptocurrency.”

If passed, those who “mine, generate, hold, sell, transfer, dispose, issue or deal in cryptocurrencies directly or indirectly” could be jailed for up to 10 years. The draft also advocates the introduction of the ‘Digital Rupee’, an official digital currency for India, which would presumably not land users in jail. 

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