Categories: Bitcoin In India
December 16, 2017
| On 1 year ago

Finance Ministry forms a new panel to examine Bitcoin regulation

By Koustav Shaw @@GodKoustav

Recently, the Finance Ministry formed a new panel to address the growing concern on the Bitcoin issue. The new committee will be headed by DEA Secretary Subhash Chandra Garg, according to a CNBC TV 18 report. The members who constitute the panel are RBI Deputy Governor SP Kanungo, Sebi Chairman Ajay Tyagi, and IT Secretary is the other members of the newly formed panel, the report said. Earlier this year in April a committee was formed comprising nine members including representatives of RBI, SBI, NITI Aayog and Department of Financial Services. The board was formed to examine the existing framework on digital or cryptocurrencies both in India and globally and recommend measures for dealing with threats arising out of such virtual currencies such as money laundering and others. The Centre had allotted a three-month period to the panel for submitting this report. The panel had then said that Bitcoin (most popular cryptocurrency) is neither a currency nor a coin. It had further said that those dealing with cryptocurrencies in India should shut shop. The panel had suggested a law to declare Bitcoin illegal if the measures to curb it appeared ineffective.

Income Tax surveys

The Income Tax department lately conducted survey operations at the nine major Bitcoin exchanges of India. Bitcoin is not regulated in the country, and its circulation has been a cause of concern among central bankers the world over for quite a while now. Several teams of the sleuths of the department, under the leadership of the Bengaluru investigation wing, visited the premises of nine such exchanges in the country including in Bengaluru, Delhi, Gurugram, Kochi, and Hyderabad. The survey was conducted under section 133A of the Income Tax Act, for gathering evidence for establishing the identity of investors and traders, transaction undertaken by them, identity of counterparties, related bank accounts used, among others.

RBI’s position on the matter

The Reserve Bank of India is not enthusiastic by the idea of the virtual currencies. Cautioning users, holders, and traders of VCs on Tuesday last week, the third time since February 2013, India’s central banking institution came out with another warning letter making them aware about the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs. “In the rise of a significant spurt in the valuation of many VCs and rapid growth in Initial Coin Offerings (ICOs), RBI reiterated the concerns conveyed in the earlier releases,” said the central bank. RBI clarified that it had not given any license or authorization to any organization or company to operate such schemes or deal with Bitcoin or any VC. The Reserve Bank of India first warned the investors about the risks associated with trading in VCs way back on 24 December 2013. After that, it was on 1st February 2017 another press release was issued by the central bank in this regard.

Koustav Shaw @@GodKoustav

I always hate talking about myself because it feels weird to talk about myself honestly. Ever think that it's weird? No? Just me? My bad. Always hungry, always sleepy and in between always writing. Hope you won't mind!

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