India may soon take a call on how to deal with virtual currencies including bitcoins on the regulatory front with a government-appointed panel submitting its report to Finance Minister Arun Jaitley here recently.
“The inter-disciplinary committee chaired by Special Secretary in Department of Economic Affairs has submitted its report,” an official said.
The contents of the report have not yet been made public.
It may be recalled that the government had in April this year constituted an Inter-Disciplinary Committee comprising nine members including representatives of RBI, SBI, NITI Aayog and Department of Financial Services.
This panel was tasked to examine the existing framework on digital/crypto currencies both in India and globally and come out with measures for dealing with such virtual currencies on issues relating to consumer protection, money laundering etc. The Centre had given three months time to the panel for submitting this report.
Already, there is an ongoing debate within the country as to whether crypto-currencies including bitcoins should be legalised or not.
Crypto-currency start-ups such as ZebPay are pitching for a model where the industry association Digital Assets and Blockchain Foundation of India (DABFI) is allowed to function as a self regulatory organisation.
ZebPay is one of the founder members of DABFI.
“We are for some form of a task force or a controlling body that will be monitoring the activities of exchanges. We want ultimately exchanges to get licences just as banks are granted licences”, Saurabh Agrawal, Co-Founder & CEO, ZebPay, told BusinessLine.
Agrawal also said that recognising crypto-currencies as a separate new asset class was crucial.
Some of the critical issues that need to be addressed in India is the accounting and taxation treatment of the virtual currencies.
Japan had recently passed a law to recognise Bitcoin as a legal method of payment. Bitcoin is a new concept, but is in the process of being understood and adopted by a growing number of consumers, businesses and investors around the world.
Jaitley had recently informed Parliament 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, he told the Lok Sabha in a written reply.