The Indian government said on Tuesday it will introduce a bill next week to ban all private cryptocurrencies and create a framework for a central bank-backed digital currency, according to a parliamentary notice.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 “would create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India,” the Lok Sabha (lower house) said in its daily bulletin of upcoming legislation.
“The Bill also seeks to prohibit all private cryptocurrencies in India,” the Lok Sabha bulletin added. However, there would be certain exceptions to promote underlying technology, the government said.
The move comes after a warning last week from Narendra Modi, India’s prime minister.
Modi told the Sydney Dialogues that bitcoin and other cryptocurrencies present a risk to younger generations and could “spoil our youth” if it ends up “in the wrong hands”.
It is the latest such move by a major emerging economy, after China declared all cryptocurrency transactions illegal in September.
India’s crypto market has boomed since the country’s Supreme Court overturned a previous ban in April last year, growing more than 600% over the past year, according to research by Chainalysis.
Between 15 and 100 million people in India are estimated to own cryptocurrencies.
India’s central bank announced in June that it is working to introduce its own digital currency by the end of the year, while warning it has “serious concerns” about private cryptocurrencies like bitcoin, ethereum and others.