The advertisements are the core source of revenue for television channels and now with the 2020 Olympic games, and increased TRP will see an increase in advertisements in that channel. In almost every ad break, there’s one particular advertisement that can be seen quite often. That is the ad for bitcoins. Bitcoins are a form of digital currency that can be used to perform online transactions. It is a form of cryptocurrency which is digital or virtual in nature and has no tangible form. It is just a few lines of 0s and 1s (binary code, which is the only language the computer understands) that can be stored on computer devices. Also, big technical giants like Microsoft and Twitter and popular coffeehouse Starbucks have already started accepting bitcoins as legal transactional currencies.
Legality of cryptocurrencies
An Interministerial Committee was constituted to study the issues relating to cryptocurrencies in India and to propose the necessary actions which had to be taken. The Committee gave its report on 22/02/2019 and it recommended enacting legislation that bans or prohibits all the activities relating to cryptocurrency in India. The government of India had accepted its report and introduced the Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019. This Cryptocurrency Bill defined the term cryptocurrency as anything which means any information, code, number or token generated through cryptographic means or otherwise and which represents value or functioning as a store of value in financial transactions. In simpler terms, it is not a state currency or in other words, it is a type of currency that is used in financial transactions but is not recognized by the State. Cryptocurrency is an asset whose functioning and regulation is not the department of the State but rather is based on blockchain technology. The key difference between cryptocurrency and fiat currency which is issued by the RBI is that fiat currency is measured by the value which is assigned to it by the RBI whereas cryptocurrency draws its values from the market forces i.e. demand and supply.
Now this Cryptocurrency Bill, 2019 created a ruckus in the market since it prohibited the use of cryptocurrencies and made it a penal offence which can be punished with a fine or imprisonment up to 10 years or both. However, the market was fortunate as the Bill remained a Bill and did not become a law. But the story doesn’t end here.
RBI imposed a ban on cryptocurrencies through a notification dated 06/04/2018. This was challenged in the Supreme Court in Internet and Mobile Association of India vs RBI (2020 SCC Online SC 275). The Apex Court overruled the RBI notification and it provided the holders and traders of cryptocurrency respite and reassurance.
Cryptocurrency and Regulation of Official Digital Currency Bill 2021
The Cryptocurrency Bill of 2021 is not available in the public domain yet but is listed on the Lok Sabha Bulletin on 29 January 2021. What we can infer is that this Bill provides the framework for the regulation of cryptocurrencies. On 24 March 2021, the Ministry of Corporate Affairs (MCA) released a notification mandating companies that indulge in cryptocurrencies to make disclosures of cryptocurrency transactions during their financial year in their financial statements.
It cannot be said that the present Bill seeks to abolish cryptocurrency as it would seem vague since the MCA is demanding cryptocurrency details from companies. However, there are hopes of a new regulatory framework to govern these matters since Bitcoins are becoming increasingly popular.
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