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A detailed report and solution for India by Policy 4.0. to tackle the spectrum of regulatory risks the government faces with cryptocurrency. The report outlines a comprehensive policy risk framework for India with cryptocurrency and recommends India build its own "India wallet" to tackle KYC, the inflow and outflow of cryptocurrency and monetary concerns.

India is reportedly looking to bar most private crypto-assets when it introduces Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the winter session of Parliament. Through the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, India is also looking to set up the framework for the Reserve Bank of India to issue central bank digital currency (CBDC).

This article aims to analyse the framework, or a lack thereof - of cryptocurrencies in India. The article is divided into various parts viz. Part I, which examines the legal position in India and chronology of legal events with respect to VC's. Part II examines the road ahead, in light of the newly proposed Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, with emphasis laid on the concerns around it. Part III contains the concluding remarks wherein the need for a holistic law is stressed upon along with recommendations drawn from the international framework and overall need for cryptocurrency laws.

The Reserve Bank of India (RBI) is reportedly in dialogue with its counterparts from at least 18 other countries on the possibility of cross-border payments in the digital rupee. Banks from these countries have already opened rupee vostro accounts since July 2022. India is eager to promote CBDC as a payment method for importing Indian goods for countries that are struggling with the U.S. dollar supply.

The Reserve Bank of India (RBI) will start pilot testing its digital rupee retail central bank digital currency (CBDC), on December 1, 2022 in Mumbai, New Delhi, Bengaluru and Bhubaneswar with the initial participation of four banks: State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank, later extending to nine more cities and another four institutions. The pilot will be conducted in a closed user group of participating customers and merchants. The CBDC will be issued in the same denominations currently used for notes and coins. Payments to merchants will be made using QR codes and, like cash, the digital rupee will not earn any interest. https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=54773

The Reserve Bank of India (India) and the Central Bank of the United Arab Emirates (CBUAE) signed a memorandum of understanding (MoU) to explore the interoperability between the central bank digital currencies (CBDCs) of the two central banks. The banks will jointly conduct proof-of-concept (PoC) and pilot(s) of bilateral CBDC bridges to facilitate cross-border CBDC transactions of remittances and trade. The MoU also provides for technical collaboration and knowledge sharing on matters related to Fintech and financial products and services. https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55372

The Deputy Chairman of the State Duma, Alexander Babakov, suggested that Russia, China and India should trade using a common digital currency, which could be a digital ruble, rupee or yuan. "India, Russia, and China are the countries that now create a multipolar world that is backed by the majority of countries. Its creation should be based on establishing new financial ties based on a system that does not safeguard today's dollar and euro, but rather creates a new currency capable of serving our goals," he said. https://tass.com/economy/1596017

Facebook's Libra may not be available in India due to the current ban of blockchain-based currency transactions. Apparently, Facebook has not applied for approval with the Reserve Bank of India to operate its digital currency in the country.

The much-awaited Government of India report on blockchain and virtual currencies promises a massive boost to the blockchain sector in India, but delivers a fatal blow to bitcoin, Ripple XRP, ethereum, and other crypto-currencies through the proposed "Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019".

India is reportedly looking to introduce a law to ban crypto-assets, as the government sees a legal framework as being more effective than a circular from the Reserve Bank of India (RBI) in this regard. The spur for the draft cabinet note was apparently the March 4 decision of the Supreme Court to quash the April 2018 circular from the RBI that prevented banks from providing services in support of crypto-assets.

"A recent report by EIU (The Economist Intelligence Unit) found that India is leading the real-time payments market, followed by China and South Korea. In terms of the mobile payment market, China leads instead, followed by India. Following the success of India's UPI, several countries are currently in the process of building instant real-time payment platforms. Brazil, for example, debuted its fast payment Platform, Pix, in late 2020. In early 2021, Saudi Arabia unveiled its new version of the instant-payments platform, Sarie, which facilitates a quick transfer of funds using various methods of identification, including mobile numbers and email addresses."

India is looking to bar most private cryptocurrencies when it introduces Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the winter session of Parliament, according to a bulletin posted on Lok Sabha, the Indian parliament's official website. However, the Bill will permit "certain exceptions" to promote the underlying technology of cryptocurrency and its applications. The Bill also includes the framework for the Reserve Bank of India to issue central bank digital currency (CBDC). Of note, the Bill's description is apparently identical to the one the government listed for the previous parliamentary session earlier this year.

The Reserve Bank of India (RBI) is reportedly in talks with fintech companies and state-controlled banks about a trial run of a central bank digital currency (CBDC) with a possible rollout by the end of the fiscal year ending March 31, 2023. The list of fintechs that the RBI is consulting include US-based FIS, plus four state-run banks to run a pilot CBDC project (State Bank of India, Punjab National Bank, Union Bank of India and Bank of Baroda).

The Reserve Bank of India (RBI) is proposing to allow linking of credit cards on the United Payments Interface (UPI) platform beginning with RuPay credit cards. Rupay is India's homegrown card network, which is promoted by the National Payments Corporation of India, a body of the RBI that also oversees UPI payments. The is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood.

The diagrams below show the detail. UPI = payment markup language + standard for interoperable payments. UPI has gone through explosive adoption since its inception in 2016. It builds a digital payments ecosystem with payment apps, banks, and NPCI (National Payments Corporation of India). It now takes up 60% of digital retail transactions in India.

WhatsApp Pay is still not compliant with data regulations in India. As per the Reserve Bank of India's norms, payment firms must store all their data locally.

The Reserve Bank of India (RBI) has said that the popular messaging platform WhatsApp is not in compliance with the central bank's data localisation norms in India. RBI's comments come as response in an affidavit, reviewed by TOI, filed with the SC on Wednesday after the apex court made the central bank a party to a writ petition in January.

Digital transactions in India increased by 55% last year, compared with 48% in China and 23% in Indonesia. By comparison, cashless payments grew about 10% in the UK, a developed market where card transactions are already entrenched.

The Reserve Bank of India announced fresh steps to push digital payments in India, including removing charges on online fund transfer system National Electronic Funds Transfer, introducing interoperable system such that FASTags can be used to pay parking fees, fuel, among other measures.

The Government is now planning to fast-track the proposed ban and pass the Crypto Bill. If the proposed Crypto Bill becomes law, India will officially ban private cryptocurrencies rather than regulating them like corporate stocks.