Cryptocurrency bill proposed by the finance ministry aimed to ban all private crypto currencies except issued by the state. So, no person shall mine, generate, hold, deal, issue, transfer or use of crypto currencies in the territory of India. However, it doesn’t mean that the central bank is proposing to ban the underlying Blockchain platform. Govt can ban the Ether but the Ethereum blockchain , which facilitates smart contracts doesn’t come under the ambit of the ban. So, one can employ the underlying technologies for the research or experiment without involving any crypto currencies for ex. Distributed ledger network can be used to record financial transactions or for other services without involving any crypto currencies. So, crypto currencies other than issued by the CG shall not be used as legal tender within India./

Further it provides that whoever directly or indirectly mines, generate, hold, sell or issue crypto currencies shall be punishable with fine or with imprisonment whose details is as below:

Offence Maximum imprisonment
Mining, holding, selling, issuing, transfer or use of cryptocurrency  in the country (draft Bill) 10 years
Proceeds of crime involved in money laundering related to offences under the Narcotic Drugs and Psychotropic Substances Act, 1985 (PMLA) 10 years
Involvement in activities connected with proceeds of crime including its concealment, possession, acquisition or use or projecting it as untainted property (PMLA) 7 years
Holding of foreign exchange of aggregate value exceeding one crore rupees (FEMA) 5 years

So, the draft Bill bans the use of cryptocurrency as legal tender or currency. It has yet to be taken up by the Lower House and Upper house of parliament for final approval after the cabinet nod.

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September 2021