Govt panel to examine virtual currencies

Concerned over potential financial and security related risk of virtual currencies such as bitcoin, the government on Wednesday set up a committee to suggest measures to deal with such currencies including their use in money laundering.

“The circulation of virtual currencies which are also known as digital/crypto currencies has been a cause of concern. This has been expressed in various fora from time to time. The Reserve Bank of India had also cautioned the users, holders and traders of VCs, including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to,” the finance ministry said in a statement.

The committee will take stock of the present status of virtual currencies both in India and at the global level, examine the existing global regulatory and legal structures governing virtual currencies and suggest measures for dealing with such currencies including issues relating to consumer protection and money laundering.

The committee has also been asked to examine any other matter related to virtual currencies which may be relevant. The inter-disciplinary committee, chaired by special secretary, economic affairs department, has been asked to submit report before July 15.

The committee will have representatives from department of economic affairs, department of financial services, department of revenue (CBDT), ministry of home affairs, ministry of electronics and information technology, RBI, Niti Aayog and State Bank of India.