The panel formed by the Indian finance ministry has reportedly provided the government with some long-awaited recommendations on how to deal with digital currencies including bitcoin. Immediate steps are to be taken to stop or discourage their use.
Immediate Steps Recommended
A multi-ministerial panel formed by the Indian finance ministry in April to study and suggest measures for the government to deal with digital currencies including bitcoin has reportedly given the government its official recommendations. The Financial Express reported that:
[The panel] has recommended the government to take immediate steps to stop use of VCs [virtual currencies] such as bitcoins to protect people from potential frauds and curb money laundering.
Prior to submitting its report to the government, the panel sought views from the public as well as cryptocurrency start-ups. It recently held a meeting where stakeholders were consulted, Minister of State for Finance Arjun Ram Meghwal said last week, adding that it looked into various aspects of digital currencies such as the usage of bitcoin.
The panel also proposed that if the use of digital currencies continues, the government has the option of stopping their transactions by regulating commercial establishments and intermediaries, sources told the news outlet.
Cryptocurrencies Already on the Rise in India
Meanwhile, bitcoin adoption in India is rapidly growing especially in cities like Bangalore, where Unocoin, one of the largest bitcoin exchanges in the country is located. The company told Bitcoin.com that over 50 new merchants have signed up to accept bitcoin this month alone. According to a recent survey, professionals in most industries have heard of bitcoin, even though they have not used it themselves.
A government official said that intermediaries have been regularly advertising cryptocurrencies and the government’s silence on them “can be construed as permission for such activities,” the Financial Express detailed, adding that:
The panel suggested that the government should launch a campaign to discourage people from buying digital currencies and stop advertisements by VC intermediaries.
Government Still Undecided on Bitcoin Regulation
The Indian government has long been looking into regulating digital currencies like bitcoin. In addition to the aforementioned panel, the government has also set up a task force to look into regulating digital currencies. Recently, the Supreme Court has independently ordered the Reserve Bank of India (RBI) to investigate complaints regarding its inaction over digital currencies, giving the central bank four weeks to come up with a report.
Meanwhile, the RBI suggested that the Securities and Exchange Board of India (SEBI) should be the one regulating bitcoin as it should be considered a commodity, to which SEBI disagrees. The news outlet further noted:
The panel, however, did not recommend a blanket ban on digital currencies, as it is difficult to implement.
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