India can ban all cryptocurrencies except “digital rupee”

The bill, which is supposed to impose a ban on the use of cryptocurrencies in India, is distributed by local experts on the blockchain in social networks.

Document published
In Scribd on July 15, a lawyer Varun Sethi entitled “Banning Cryptocurrencies and Regulating Official Digital Currencies” is supposedly a draft law being prepared for release by the Government of India.

The document proposes a definition of cryptocurrency as “any information, code, number or token that is not part of any official digital currency, generated by cryptographic means or otherwise, providing a digital representation of the value […]”. The definition further specifies the use of such currencies in financial transactions and investment schemes.

The proposed bill states that a “digital rupee” issued by the country’s Reserve Bank will be approved by the government as legal tender, while all currencies that meet the above definition of cryptocurrency will be completely banned. The document reads:

“No one can generate, store, sell, issue, transfer, dispose of or use cryptocurrency in India.”

The proposed ban, in particular, does not apply to those using distributed registry technologies (DLT) or other related technologies for experimentation or research, including in educational contexts, provided that no cryptocurrency is used to make payments.

The ban will also not be used when using DLT to create a network that provides financial or other services, provided that such actions do not involve the use of cryptocurrencies as a means of payment.

The proposed punishment for violation of the ban: a fine, or imprisonment for up to ten years, or the appointment of both preventive measures.

At the beginning of the year it was reported that India was completing
the development of a regulatory framework for the regulation of cryptocurrency, but the law was never published. The delay in the release of regulation negatively affects the cryptocurrency industry in the country. The issue of a ban on banking services for cryptocurrency companies initiated by the Central Bank of the country has not yet been resolved, and recently Facebook declared that it would not launch Libra in India due to regulation problems.