Govt panel suggests ban on cryptocurrency in India

An inter-ministerial panel set up to look into the issues of virtual currencies on Monday suggested a complete ban on private cryptocurrencies but opened the door for a possible official digital rupee.

The report of the committee headed by Secretary, Department of Economic Affairs, Subhash Chadra Garg, is likely to be accepted in toto by the Centre.

“The Committee notes with serious concern mushrooming of cryptocurrencies... All these cryptocurrencies have been created by non-sovereigns and are in this sense entirely private enterprises. There is no underlying intrinsic value of these private cryptocurrencies.” it said in a 100-page report submitted to the government and recommended bringing a law to ban cryptocurrencies in India.

It also recommended that carrying such currencies should be treated as a criminal offence in India. The Committee said all exchanges, people, traders and other financial system participants should be prohibited from dealing with cryptocurrencies.

It, however, said the government in consultation with the central board of the Reserve Bank of India, may approve digital rupee to be legal tender.

“The digital rupee shall be governed by such regulations as may be notified by the RBI and relevant provisions of the Reserve Bank of India Act, 1934,” the panel said.

Other than Bitcoin, several other cryptocurrencies have made their name across the globe. These include Ethereum, Ripple and Cardano. As of date, there are around 2,116 cryptocurrencies, with a market capitalisation of $119.46 billion.

Cryptocurrencies have been accorded different treatment across the world with Japan recently recognising Bitcoin as a means of payment, China imposing a complete ban on virtual currencies and US President Donald Trump recently saying he is not a great fan of Bitcoin.

While countries have different stance on virtual currency, no country treats virtual currencies as legal tender.

In February 2018, there were around 50 lakh traders in India in 24 exchanges and cryptocurrency trading volumes were in the range of 1500 bitcoins a day, or around Rs 1 billion, according to the report.