Draft Bill Banning Cryptocurrency
- 23 Jul 2019
- 3 min read
The Inter-Ministerial Committee on Virtual Currency constituted under the Chairmanship of Subhash Chandra Garg has submitted its report along with Draft Bill ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’.
Provisions of the Draft Bill
- Cryptocurrency cannot be used as legal tender or currency at any place in India.
- The bill prohibits everyone to mine, generate, hold, sell, deal in, issue, transfer, dispose of or use Cryptocurrency in the territory of India.
- The Central Government is allowed to declare Digital Rupee to be legal tender with the consent of the Reserve Bank of India.
- The Reserve Bank is empowered to declare any official foreign digital currency to be recognised as foreign currency in India.
- The use of Distributed Ledger Technology for creating a network for delivery of any financial or other services or for creating value, without involving any use of cryptocurrency is not prohibited.
- Direct or indirect use of Cryptocurrency shall be punishable with fine or imprisonment of 1 year which may be extended to 10 years or both.
- The maximum amount of fine that may be imposed upon a person for an offence shall be as follows:
- the higher of,–
- three times the loss or harm caused by the person; or
- three times the gains made by the person.
- the higher of,–
- The Court is empowered to transfer any fees recovered, to the Consolidated Fund of India.
- The Central Government on the recommendation of investigating agency without being bound to it, is empowered to grant immunity for any offence under the act.
- The bill also provides that no such immunity can be granted by the Central Government in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of application for grant of such immunity.
- Digital Rupee means a form of currency issued digitally by the Reserve Bank and approved by the Central Government to be legal tender.
- Blockchain is one type of a distributed ledger.