Narendra Modi, India’s Prime Minister, speaks during the United Nations Virtual General Assembly on Saturday, September 26, 2020.

Daniel Acker | Bloomberg | Getty Images

The Indian government plans to introduce a bill in the country’s lower house that bans private cryptocurrencies like Bitcoin and creates a national cryptocurrency.

The so-called “cryptocurrency and regulation of the official law on digital currencies” aims to “provide a framework for the creation of the official digital currency to be issued by the Reserve Bank of India”.

In addition, “the bill is also intended to ban all private cryptocurrencies in India, but provides certain exemptions to promote the underlying technology of the cryptocurrency and its uses.”

Under the front line of Prime Minister Narendra Modi, the right-wing Bhartiya Janata party is currently in control of India’s two parliament buildings (Lok Sabha and Rajya Sabha), giving the legislation a strong chance of passage.

Bitcoin’s value rose more than 20% to $ 38,566 on Friday after Elon Musk changed his personal Twitter bio to #bitcoin.

This isn’t the first time Indian lawmakers have taken such a strong stance on cryptocurrencies. In 2018, an Indian government body recommended banning all private cryptocurrencies and proposed prison sentences of up to 10 years for offenders.

In the same year, then Indian Finance Minister Arun Jaitley said: “The government does not recognize cryptocurrency as legal tender or coin and will take all measures to prevent the use of these crypto-assets to fund illegitimate activities or as part of the payment system.” . “

India’s monetary regulator temporarily banned crypto transactions after a series of fraudulent activities in 2018. However, this policy was later overturned by the Supreme Court of India in March 2020.

Many countries – including the USA, China, Japan, Canada, Venezuela, Estonia, Sweden and Uruguay – have examined the development of their own digital currencies.

However, there are significant differences between national digital currencies and private cryptocurrencies such as Bitcoin. Cryptocurrencies like Bitcoin are decentralized, while national digital currencies are usually centralized.