No Proposal to Recognize Bitcoin as a Currency: FM

The government on Monday informed the Lok Sabha that there was no proposal to recognize Bitcoin, a popular cryptocurrency, as a currency.

The government said the Reserve Bank of India (RBI) was working out a phased implementation strategy to introduce a Central Bank Digital Currency.

The RBI had moved a proposal in October seeking to amend the Reserve Bank of India Act, 1934, to enhance the scope of the definition of ‘bank note’ to include currency in the digital from.

To a query on whether the government had any proposal to recognize Bitcoin as a currency in the country, union finance minister Nirmala Sitharaman replied in the negative. “No, sir,” she said in a written response in the Lok Sabha.

The government intends to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 in the ongoing winter session of Parliament. It seeks to prohibit all private cryptocurrencies and introduce an official digital currency of the central bank. To another query on if the government had received any proposal to introduce a Central Bank Digital Currency, along with the details of the proposal and the plans to introduce digital currency, the government said the central bank was working on a phased implementation strategy by examining the use cases to avoid disruptions.

Pankaj K Chaudhary, minister of state for finance, added that the RBI had moved a proposal in October seeking to amend the Reserve Bank of India Act to enhance the scope of the definition of ‘bank note’.

“The purpose of creating a digital currency is to provide significant benefits, such as reduced dependency on cash, higher seignior age due to lower transaction costs and reduced settlement risk,” he said in a written response.

The minister said a new digital currency would also possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option. However, he warned, there were associated risks which needed to be carefully evaluated against the potential benefits. S-ET

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