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Govt Committee Suggests Ban on All Private Cryptocurrencies Except Those Issued by State: FM Sitharaman

File photo of Union Finance Minister Nirmala Sitharaman.

File photo of Union Finance Minister Nirmala Sitharaman.

She repeated the government's stance on Bitcoin and said it was announced in the Budget Speech for 2018-19 that it does not consider cryptocurrencies legal tender or coins and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.

Union Finance Minister Nirmala Sitharaman said on Tuesday that a high-level committee suggested that all the private cryptocurrencies, except any virtual currencies issued by state, will be prohibited in India.

"A high-level Inter-Ministerial Committee (IMC) constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose specific actions to be taken in the matter recommended in its report that all private cryptocurrencies, except any virtual currencies issued by state, will be prohibited in India," she said in reply to a question in the Rajya Sabhya on whether the Centre was planning to issue guidelines on cryptocurrency trading, LiveMint reported.

She repeated the government's stance on Bitcoin and said it was announced in the Budget Speech for 2018-19 that it does not consider cryptocurrencies legal tender or coins and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system. "The government will explore use of block chain technology proactively for ushering in digital economy," her reply stated.

Minister of State For Finance Anurag Thakur told Rajya Sabha on Tuesday that the government will soon bring a bill on crypto currencies as existing laws are inadequate to deal with issues concerning them.

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Replying to a question in the Upper House, Thakur said regulatory bodies like RBI and Sebi do not have any legal framework to directly regulate crypto currencies as they are not currencies, assets, securities or commodities issued by identifiable users.

"The existing laws are inadequate to deal with the subject," he said. The government had formed an Inter-Ministerial Committee which has given its report on issues related to virtual currencies. There was also a meeting of the Empowered Technology Group. The Committee of Secretaries chaired by the Cabinet Secretary has also given its report.

"A bill (on crypto currencies) is being finalised and it will soon be send to the Cabinet. We will soon be bringing a bill," Thakur said. In view of the risks associated with Virtual Currencies (VCs), including Bitcoins, the Reserve Bank of India (RBI) through a circular in April 2018, had advised all the entities regulated by it not to deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs.

However, Supreme Court, vide judgement dated March 4, 2020, had set aside the RBI's circular. To another question regarding Chinese companies in the country, the minister said as of now, there are around 92 companies registered in the country. Out of them, 80 Chinese companies are actively working in India.

first published:February 09, 2021, 18:12 IST