An Indian draft bill calling for banning all cryptocurrencies has leaked online and is being circulated all over the web. The document makes it clear that the ban is only on cryptocurrency and not on the technology behind most of the cryptos, the distributed ledger technology (DLT).
The document, titled “Banning of Cryptocurrency & Regulation of Official Digital Currencies”, was published on Scribed by Varun Sethi, an Indian lawyer on 15th July. The document seems to be a draft bill but the authenticity of the document has not been verified as of yet.
The document specifies that the use of the DLT for research, education or any other means for non-financial use is not prohibited. Only the use of the technology for issuing digital tokens is prohibited, according to the draft law.
Crypto influencers in India are of the opinion that the draft is real and will be among the few things that will be discussed when the Indian parliament convenes during the 2019 monsoon session. The 18-page document starts by defining cryptocurrencies 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 bill then extends the definition by adding currencies that are being used as a medium of exchange, being used in a financial transaction, or being used in an investment scheme or are considered as an account of value.
The bill makes the first mention of the digital rupee, a digital form of the Indian rupee, that will be operated and issued by the country’s central bank, the Reserve Bank of India. All other cryptocurrencies being circulated in the country that are not according to the above definition would be considered illegal. 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 is being paraded all over social media by local and foreign crypto enthusiasts.
The law also prohibits the use of DLT to create decentralized networks for financial transactions and services or to create an unauthorized payment system. The draft law does propose serious punishment for failure to comply with the law. According to the document, any person found violating the set guidelines on the Indian soil can face either up to 10 years in prison or a fine.
Reserve Bank of India Working on Blockchain
While it has been rumored for long that the country will outrightly ban cryptocurrencies this year, BlockPublisher reported how the Reserve Bank of India (RBI) has started working on the very technology behind the decentralized cryptos, blockchain. The bank is reportedly developing the system in the research branch of the RBI, the Institute for Development and Research in Banking Technology (IDRBT).
The blockchain platform that is expected to launch next year is expected to be a game-changer in Indian banking services. The bank hopes to improve banking services by bringing the applications of blockchain into banking. Talking to an Indian news outlet, Business Line, AS Ramastri, Director of IDRBT, announced the launch of this project:
We have been working on a model platform for blockchain applications for the government in banking. It will be documented and developed next year.