Although the government has refused to answer questions about a Cryptocurrency regulation bill, there are reports of a draft bill known as “Banning of Cryptocurrencies and Regulation of Official Digital Currency Bill 2019”. Among other things, the Bill proposes a penalty along with a jail term of up to 10 years, for those who “mine, generate, hold, sell, transfer, dispose, issue or deal in cryptocurrencies directly or indirectly”. Offences would be “cognisable and non-bailable”, says the report.
The Bill has reportedly been drafted with recommendations from a panel headed by Finance Secretary Subhash Chandra Garg and comprises members from the Reserve bank of India, Securities and Exchange Board of India, Central Board of Direct Taxes, investigative agencies, among others.
The Finance Secretary was quoted last year to submit the bill in July 2018, which got further delayed with multiple tentative dates of submission. Once submitted it still needs approval from the Parliament before it can be implemented.
The report suggests that everyone holding cryptocurrencies will be given 90 days to declare and dispose them off.
The draft bill proposes to amend the Prevention of Money Laundering Act, 2002, in accordance to earlier reports, to include mining and generation of tokens as well as buying, selling and trading of cryptocurrencies.
This would mean that the central government may approve digital rupee to be a legal tender, in consultation with the RBI’s central board. But it would be a government issued digital currency equivalent to INR and would be governed by regulations that will be notified by the central bank under relevant provisions of RBI Act, 1934, the draft bill said as per the report.
The Reserve Bank of India has categorically denied any knowledge of the proposed draft bill for banning cryptocurrencies.