About the Committee
The inter-disciplinary committee was established by the Department of Economic Affairs of the Ministry of Finance. It is chaired by Special Secretary (Economic Affairs) and includes representatives from Department of Economic Affairs, Department of Financial Services, Department of Revenue (CBDT), Ministry of Home Affairs, Ministry of Electronics and Information Technology, Reserve Bank of India (RBI), National Institution for Transforming India (NITI Aayog) and State Bank of India.
The committee is tasked to:
- take stock of the current status of digital currencies both in India and globally;
- examine the existing global regulatory and legal structures of digital currencies;
- suggest measures for dealing with digital currencies in areas such as consumer protection and money laundering; and
- examine any other relevant matter related to digital currencies.
India’s Concerns Over Digital Currencies
In its announcement, the Finance Ministry wrote:
The circulation of Virtual Currencies which are also known as Digital/Crypto Currencies has been a cause of concern. […] Reserve Bank of India had also cautioned the users, holders and traders of Virtual currencies (VCs), including bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to.
The first official warning from RBI regarding digital currencies was issued on December 24, 2013, and the second one was issued on February 1.
Recently, Indian Parliament Member Kirit Somaiya has outwardly spoken against Bitcoin. He raises concerns over the lack of regulatory structure around the digital currency, urging regulators to declare it illegal in India. Speaking last week in the Lok Sabha, India’s House of the People, he said: “I urge upon the government to take a look at bitcoins. It is an illegal currency.”
In a recent interview with Moneycontrol, he differentiated his country from Japan which recently passed a law to recognize Bitcoin as a legal method of payment. He told the publication:
I do not agree with Japan and what has happened in Japan, nobody knows. It is our country, our nation. […] The RBI has to take action and I will see that they do take action.
Meanwhile, bitcoin trading volume has been climbing in India. Last week’s volume on the third-largest exchange that accepts Indian rupees, Localbitcoins, was 18.5 million rupees.
