No proposal to recognise Bitcoin as currency: Centre

No proposal to recognise Bitcoin as currency, FM Sitharaman informs Lok Sabha

In a written reply in Lok Sabha, the Ministry of Finance said that the government does not collect data on Bitcoin transactions in the country

Finance Minister Nirmala Sitharaman. Credit: PTI Photo

India does not have any plans to recognise Bitcoin as a currency, Finance Minister Nirmala Sitharaman informed the Lok sabha. However, the finance ministry has hinted at allowing a digital rupee backed by the Reserve Bank of India.

To a question on whether the government has any proposal to recognise Bitcoin as a currency in the country, the finance minister said, “No”.

Bitcoin is a digital currency. It uses peer-to-peer technology to operate with no central authority or banks managing transactions.

Minister of State for Finance Pankaj Chaudhary in response to another question in the House, said the RBI had in October sent the proposal to the finance ministry to amend the definition of 'bank note' to include currency in digital form.

Also read: Centre plans to bring bill to ban private cryptocurrency, 25 other bills at Winter Session

He said the introduction of central bank digital currency has the potential to provide significant benefits such as reduced dependency on cash, higher seigniorage due to lower transaction costs, reduced settlement risk. It will possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option.

There are also associated risks that need to be carefully evaluated against the potential benefits, he said.

Also Read | Cryptocurrency is here to stay, says Paytm founder

The statement by two ministers in the Lok Sabha comes at a time when the government is planning to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 in the ongoing Winter Session of Parliament. The Bill seeks to ban private cryptocurrencies while allowing an official digital currency by RBI.

Modi had recently chaired a crucial meeting on the way forward for cryptocurrency and warned that it cannot be let to become avenues for money laundering and terror financing.

RBI Governor Shaktikanta Das has time and again voiced his concern over cryptocurrencies and their impact on macroeconomy and financial stability of a country. He maintains that any digital currency must have the central bank’s backing.

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