GD Topic: Crypto Currency and Regulation of Official Digital Currency Bill 2021

Add Review

Register now for latest MBA Exam & Admissions Updates

With Bitcoin and other popular crypto currencies booming, Indian Government is planning legislation that would create the ground for the introduction of an official digital currency and prohibit private cryptocurrencies. A bill for this is likely to be introduced in the ongoing session of parliament. As per Lok Sabha Bulletin Part II, The Crypto-currency and Regulation of Official Digital Currency Bill, 2021 will be introduced by the Government of India to ban trading and investments in private crypto-currencies such as Bitcoin during the Budget session of the Parliament and will provide the Reserve Bank of India (RBI) with the legal powers to develop Central Bank Digital Currency (CBDC).

 

Sources in the Government said the legislation draws extensively from the recommendations of the SC Garg Committee which was set up by the Government to provide a detailed overview and way forward on cryptocurrencies. The key recommendation of the Garg committee covered the banning of private currencies and introducing an official digital currency.

Given the importance of the development, Cryptocurrency and Regulation of Official Digital Currency Bill is expected to be a hot topic for MBA GD PI WAT 2021. Read this detailed article by MBAUniverse.com to prepare yourself. 

Alert! MBA Admissions 2024 Open for Exams and Top Colleges | Register Now
NMAT 2023 Exam Registration Open- Register Now XAT 2024 Exam Registration Open- Register Now
SPJIMR Mumbai Admission 2024 Open - Apply Now MDI Gurgaon Admission 2024 Open | Apply Now
XLRI Jamshedpur Admission 2024 Open - Apply Now MICA PGP (PGDM/PGDM-C) Admission Open- Apply Now
GREAT LAKES PGPM & PGDM Admission 2024 Open XLRI-PGDM in Logistics & Supply Chain Management
K J Somaiya MBA Admission 2024 Open | Apply Now NMIMS MBA Admission 2024 Open- Apply Now
Woxsen University MBA Admission 2024 Open BIMTECH PGDM Admission 2024 Opne | Apply Now
IBSAT 2023 Exam Registration Open- Register Now XIM University MBA Admission 2024 Open- Apply Now

The purpose of theCryptocurrency and Regulation of Official Digital Currency Bill, 2021 has been described as:

  • to create a facilitative framework for an official digital currency Central Bank Digital Currency (CBDC) issued by the RBI
  • to “prohibit all private cryptocurrencies in India”.
  • The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

Let us understand more about Central Bank Digital Currency.

 

What is Central Bank Digital Currency (CBDC):
Digital currencies or cryptocurrencies are gaining popularity across the world. This has made most central banks look at launching a digital currency controlled by them to address their shortcomings while hastening the shift towards a cashless society.

 

The Central Bank Digital Currency (CBDC) is a legal tender and liability of a nation's central bank in the digital form. It is denominated in a sovereign currency and appears on the balance sheet of a nation's central bank. CBDC is a digital currency which can be converted/exchanged at par with similarly denominated cash and traditional central bank deposits of a nation. 

Latest GD Topics: Read 200+ Group Discussion Topics 2023 for MBA Admissions  
Chandrayaan 3 – Benefits for India & Management Lessons Future of Artificial Intelligence
Uniform Civil Code: History, Benefits and Concerns, UCC Bills Success is a journey, not a destination
Work From Home: Desirable and Dream Job option for Employees? Cricket Vs Other Games in India: Is Cricket killing other Sports?
What’s there in a name Digital Personal Data Protection Bill
Peer Pressure and Family Pressure - Can it make or break your future?
Aim for the Moon, if you miss, you may hit a Star
Foreign Universities in India: Will it raise academic standards and benefit Indian students, parents?
World War 3: Will Russia Ukraine Conflict result in Third World War?
Union Budget 2023-24: Expectations & Key Highlights
Digital Public Goods (DPG): India’s approach and opportunities for the World

Tech Layoffs: Top Tech Layoffs At Big Tech Companies In 2022

India as the world’s 5th largest economy: Set to Become 4th by 2022

Indian Digital Rupee: A landmark financial initiative? Moonlighting in India - What, Why and Should of this HR nightmare
5G Telecom Services in India – Benefits and Impact
Buy Now Pay Later (BNPL): A convenience or a trap
National Logistics Policy: Will it Reduce Costs & Improve Competitiveness of India
Agnipath: Will it Prove a Military Transformation Scheme?
Is India ready for Electric Vehicles
Union Budget 2022: Key Highlights; will it propel post pandemic Economic Growth?
Crypto Currency: A bright future or just a fad
Privatization of Public Sector in India: A right step or selling family silver?
Social Media: A boon or a bane for society and individuals
E-Learning: A substitute for Classroom Learning?
Farm Laws Repealed: PM MODI withdraws the three farm laws
Central Bank Digital Currency (CBDC): Impact on Indian Financial System & Cryptocurrency

Importance of CBDC:

The Reserve Bank of India (RBI) stated that the innovations have been rapidly changing the payments space and this has made central banks across the world examine whether they could leverage on the technology and issue fiat money in the digital form or not. Recently, RBI indicated that it is conducting a feasibility study on the development of a government-backed digital currency.  

Alert! MBA Admissions 2024 Open for Exams and Top Colleges | Register Now
NMAT 2023 Exam Registration Open- Register Now XAT 2024 Exam Registration Open- Register Now
SPJIMR Mumbai Admission 2024 Open - Apply Now MDI Gurgaon Admission 2024 Open | Apply Now
XLRI Jamshedpur Admission 2024 Open - Apply Now MICA PGP (PGDM/PGDM-C) Admission Open- Apply Now
GREAT LAKES PGPM & PGDM Admission 2024 Open XLRI-PGDM in Logistics & Supply Chain Management
K J Somaiya MBA Admission 2024 Open | Apply Now NMIMS MBA Admission 2024 Open- Apply Now
Woxsen University MBA Admission 2024 Open BIMTECH PGDM Admission 2024 Opne | Apply Now
IBSAT 2023 Exam Registration Open- Register Now XIM University MBA Admission 2024 Open- Apply Now

 

Advantages of CBDC:
At present, central banks of various nations are currently examining the positive implications that a digital currency contributes to financial inclusion, economic growth,  technology, innovation and increased transaction efficiencies.

  1. Real-time money transfer: Money transfers and payments can be made in real-time from the payer to payee without relying on intermediaries such as banks. 
  2. Alternative to physical cash: Digital currencies issued by central banks would provide for a modern alternative to physical cash. 
  3. Easy tracking of currency: With the introduction of CBDC in a nation, its central bank would be able to keep a track of the exact location of every unit of the currency. 
  4. Income Tax: Tax avoidance and tax evasion will be near to impossible as methods such as offshore banking and unreported employment cannot be practised to hide financial activities from the central bank. 
  5. Curbing Crime: Criminal activities can be easily spotted and ended such as terror funding, money laundering, and so forth. 

Need for CBDCs in India:
Does India really need CBDCs? In May 2020, China started testing its Digital Yuan-- Digital Renminbi (RMB). Several other nations have also started research and pilot projects related to CBDC such as Canada, USA and Singapore. Also, China and USA are battling to gain the supremacy across markets with the introduction of new-age financial products and India may get caught up in this digital proxy war. 

Latest GD Topics: Read 200+ Group Discussion Topics 2023 for MBA Admissions  
Chandrayaan 3 – Benefits for India & Management Lessons Future of Artificial Intelligence
Uniform Civil Code: History, Benefits and Concerns, UCC Bills Success is a journey, not a destination
Work From Home: Desirable and Dream Job option for Employees? Cricket Vs Other Games in India: Is Cricket killing other Sports?
What’s there in a name Digital Personal Data Protection Bill
Peer Pressure and Family Pressure - Can it make or break your future?
Aim for the Moon, if you miss, you may hit a Star
Foreign Universities in India: Will it raise academic standards and benefit Indian students, parents?
World War 3: Will Russia Ukraine Conflict result in Third World War?
Union Budget 2023-24: Expectations & Key Highlights
Digital Public Goods (DPG): India’s approach and opportunities for the World

Tech Layoffs: Top Tech Layoffs At Big Tech Companies In 2022

India as the world’s 5th largest economy: Set to Become 4th by 2022

Indian Digital Rupee: A landmark financial initiative? Moonlighting in India - What, Why and Should of this HR nightmare
5G Telecom Services in India – Benefits and Impact
Buy Now Pay Later (BNPL): A convenience or a trap
National Logistics Policy: Will it Reduce Costs & Improve Competitiveness of India
Agnipath: Will it Prove a Military Transformation Scheme?
Is India ready for Electric Vehicles
Union Budget 2022: Key Highlights; will it propel post pandemic Economic Growth?
Crypto Currency: A bright future or just a fad
Privatization of Public Sector in India: A right step or selling family silver?
Social Media: A boon or a bane for society and individuals
E-Learning: A substitute for Classroom Learning?
Farm Laws Repealed: PM MODI withdraws the three farm laws
Central Bank Digital Currency (CBDC): Impact on Indian Financial System & Cryptocurrency