In its recommendation to the government, a special panel set up the Indian Finance Ministry to suggest measures to deal with digital currencies such as bitcoin, has urged to take immediate action to stop the use of digital currencies, the Financial Express reported.
Earlier this year, the Indian government formed a panel comprising of officials from Department of Economic Affairs, Income Tax Department, Ministry of Home Affairs, the Reserve Bank of India (RBI) and securities market regulator SEBI, to evaluate the existing international framework on digital currencies and suggest anti-money laundering and consumer protection measures best suited for the country.
The panel sought the opinion of the public and domestic cryptocurrency startups before it finalized its report. It has recommended prohibiting use of digital currencies in order to protect people from potential frauds and curd money laundering. Sources familiar with the matter told the publication that the government could also consider formulating a legislation to stop digital currency transactions.
In addition, the panel has also suggested the government to launch a campaign to discourage people from buying digital currencies. However, it did not recommend a blanket ban on digital currencies as it is difficult to implement.
An official told the Financial Express:
“This does not have any legal sanctity. VC intermediaries have been advertising regularly… the government silence can be construed as permission for such activities.”
In February 2017, the RBI issued a fresh notice to the users of virtual currencies in the country. It said, “it has not given any licence / authorisation to any entity / company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk.”
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