The proposed bill plans to set the framework for the Reserve Bank of India (RBI) to issue its own digital currency.
Indian companies and individuals are unlikely to be allowed to pull a Tesla and stash excess cash in cryptocurrencies that have been on an eye-popping surge if a new bill proposed by the government is cleared by parliament.
Expected to be introduced in this legislative session, a draft bill proposes a complete ban on all private cryptocurrencies - decentralised digital money that is prized for being untraceable and a buoyant valuation, sources have told NDTV.
The bill will also lay the groundwork for an official digital currency - which are different because they can be regulated by a country's central bank - and its ties to the Reserve Bank of India or RBI.
Exchanges, people, traders and other financial systems' participants will not be allowed to deal with cryptocurrencies and penalties have been proposed for any violation by individuals as well as corporate bodies.
The decision comes after an inter-ministerial committee including the RBI felt that private cryptocurrencies will pose a threat to the financial stability of the country.
Both the government and RBI have been warning about virtual currencies and have advised all banks and financial establishments not to deal with them.
Nearly 7 million Indians hold cryptocurrencies worth over $1 billion and there has been an over 700 per cent increase in the last year, according to official estimates.
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