The Centre on Friday admitted that there has been a “notable growth” in the bitcoin market in India over the last few years.
There is evidence that crypto currency/bitcoins are being used in the country, Finance Minister Arun Jaitley told the Lok Sabha in a written reply.
This is even as there are no regulations governing bitcoins in India. It may be recalled that the Reserve Bank of India had in February this year advised that it has not given any licence/ authorisation to any entity/ company to operate such schemes or deal with bitcoins or any virtual currency.
Jaitley said that there are mainly two categories of players operating in India, one with presence in public domain and other who operate in an unorganised manner through social media sites and mobile apps. The players operating in public domain are either exchanges or traders, Jaitley said.
The RBI has cautioned from time-to-time the users, holders and traders of virtual currencies about the potential financial, operational, legal, customer protection and security related risks.
Taking cognisance of concerns raised at various for a from time to time on increase in the use of virtual currencies and the regulatory challenges, the Department of Economic Affairs had constituted a committee on this issue.
The Panel comprised of representatives of Department of Economic Affairs, Department of Financial Services, Revenue Department, Ministry of Home Affairs, Ministry of Electronics and Information Technology, Reserve Bank of India, NITI Aayog and State Bank of India.
This committee has been tasked to stock of the present status of virtual currencies both in India and globally; examine the existing global regulatory and legal structures governing virtual currencies; suggest the framework for regulation of virtual currencies if considered including issues relating to consumer protection, taxation and money laundering.
The Department of Economic Affairs had in May this year invited public comments from Public.