RBI has proposed including digital currency under definition of bank note, Centre tells Lok Sabha
The proposed amendment to the Reserve Bank of India Act is significant as only the central bank can issue bank notes in the country.
The Centre on Monday told the Parliament that the Reserve Bank of India has proposed to include digital currency under the definition of bank note. The central bank has sought an amendment to the Reserve Bank of India Act, 1934 in this regard.
Minister Of State for Finance Pankaj Choudhary told the Parliament about the RBI’s proposal, while replying to a question seeking details of government’s plans about digital currencies in India. The RBI had made the proposal in October, Choudhary said on the first day of the Winter Session of the Parliament.
The minister’s reply came days after it came to light that Centre will introduce a Bill during the Winter Session to ban private cryptocurrencies in India and introduce an official digital currency issued by the Reserve Bank of India.
The proposed amendment is significant as only the Reserve Bank of India can issue bank notes in the country.
“CBDC [central bank digital currency] is likely to be in the arsenal of every central bank going forward,” RBI’s Deputy Governor T Rabi Sankar had said in July. “Setting this up will require careful calibration and a nuanced approach in implementation.”
Everything you need to know about RBI’s planned digital currency
‘No plans to recognise Bitcoin’
Meanwhile, Finance Minister Nirmala Sitharaman on Monday said the Centre does not have any plans to recognise popular cryptocurrency Bitcoin as a currency in India. In a reply to query in the Lok Sabha, she also said that that the government does not collect data on Bitcoin transactions.
Currently, there are no regulations on the use of cryptocurrencies in India.
Meanwhile, the Bombay High Court has directed the Centre to inform it about the introduction of the Bill on cryptocurrency and the action taken on it on January 17, 2022, reported PTI.
A bench of Chief Justice Dipankar Datta and Justice M S Karnik was hearing a plea filed by advocate Aditya Kadam, seeking directions to the Centre to formulate laws to govern the use and trade of cryptocurrency within the country.
During the hearing, Kadam claimed that the the unregulated business of cryptocurrency in the country negatively affects the rights of investors as there is no mechanism to address their grievances.
However, Advocate DP Singh, representing the Centre, said that the government would be discussing the law in the Winter Session. To this, Kadam argued that the government had similar statements in 2018 and 2019 but no action was taken.
“Let’s see if they [the Centre] enact the law,” the High Court said. “With the introduction of the Bill, the allegations raised in the petition that the government has not taken any steps would be incorrect.