India’s Government Forms Committee to Investigate Bitcoin, Report Due in 3 Months

The Indian Ministry of Finance on Wednesday announced that the government has constituted a committee to study digital currencies including bitcoin, with a report due in three months.

Also read: Drug Enforcement Officer From India Accused of Stealing Bitcoins

About the Committee

India's Government Forms Committee to Investigate Bitcoin, Report Due in 3 MonthsThe inter-disciplinary committee was established by the Department of Economic Affairs of the Ministry of Finance. It is chaired by Special Secretary (Economic Affairs) and includes representatives from Department of Economic Affairs, Department of Financial Services, Department of Revenue (CBDT), Ministry of Home Affairs, Ministry of Electronics and Information Technology, Reserve Bank of India (RBI), National Institution for Transforming India (NITI Aayog) and State Bank of India.

The committee is tasked to:

  • take stock of the current status of digital currencies both in India and globally;
  • examine the existing global regulatory and legal structures of digital currencies;
  • suggest measures for dealing with digital currencies in areas such as consumer protection and money laundering; and
  • examine any other relevant matter related to digital currencies.

India’s Concerns Over Digital Currencies

In its announcement, the Finance Ministry wrote:

The circulation of Virtual Currencies which are also known as Digital/Crypto Currencies has been a cause of concern. […] Reserve Bank of India had also cautioned the users, holders and traders of Virtual currencies (VCs), including bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to.

The first official warning from RBI regarding digital currencies was issued on December 24, 2013, and the second one was issued on February 1.

India's Government Forms Committee to Investigate Bitcoin, Report Due in 3 Months
Kirit Somaiya, MP

Recently, Indian Parliament Member Kirit Somaiya has outwardly spoken against Bitcoin. He raises concerns over the lack of regulatory structure around the digital currency, urging regulators to declare it illegal in India. Speaking last week in the Lok Sabha, India’s House of the People, he said: “I urge upon the government to take a look at bitcoins. It is an illegal currency.”

In a recent interview with Moneycontrol, he differentiated his country from Japan which recently passed a law to recognize Bitcoin as a legal method of payment. He told the publication:

I do not agree with Japan and what has happened in Japan, nobody knows. It is our country, our nation. […] The RBI has to take action and I will see that they do take action.

Meanwhile, bitcoin trading volume has been climbing in India. Last week’s volume on the third-largest exchange that accepts Indian rupees, Localbitcoins, was 18.5 million rupees.

India's Government Forms Committee to Investigate Bitcoin, Report Due in 3 Months

What action against Bitcoin do you think the Indian government will eventually take? Let us know in the comments section below.


Images courtesy of Shutterstock, Newsx, Coin.dance, and Indian Ministry of Finance


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  • Bjørn Erik Mol

    I Hope they see that Bitcoin will make India Much more attraktive for International trading and innestengt. As well as connection the hole world trough and unregulated market.. If they make it illegal it will force people to do Even more Blackmarket than before.. So it would be wise to threat Bitcoin as open as possible and perhaps make less regulations.. It will help people of India at the global multibillion industry internet is, to get same wages as someone in Western countries.. Borders would No longer excist, as at internet right now.. Internet have No Borders, neither should Internet’s currency! 🙂

    • Dhananjay Kumar Singh

      Yes you are absolutely right.

  • shantanush

    Welcome this move by the Government but Mr Kirit Somaiya first needs to educate himself on this subject rather than blatantly say “Bitcoin is a Ponzi scheme” and “I do not agree with Japan” !! Cryptocurrencies and the under-pinning technology will only end up giving India a greater push towards transparency in dealings and further greatness in the global community.

  • Aman Jadhav

    Kirit somiya must educate himself. He didn’t know anything about bitcoin.

    • Abishek D

      true…

  • sa

    Kirit somiya is a Martian and is therefore illegal.

    I will see to it that the Government takes action and send him back to Mars.

    Yes, I know all about Kirit somiya more than anyone.

  • Abishek D

    He is a dumb-ass. Modi wants everything in digital mode. Why digital currency alone should be considered illegal. First of all indian government should get themselves educated about the development of technology. Most of the so called politicians are illiterates. Even if they are literates, they don’t have knowledge about the crypto-currencies.

  • BTCFan

    I agree with all the comments.
    A short-sighted and ignorant stand taken in the parliament and wastage of time.
    Sahara was a big ponzi. Why did MP’s not crib then? Why are they cribbing now? The hidden reasons are obvious to all. Ponzi’s scheme exist with INR too. So according to his silly logic, INR should also be rendered illegal.
    Drug-peddling and terrorism exist since times much before Bitcoins. They are and were funded by INR and other official currencies. Let him ask for their being rendered illegal too!!!
    Some MPs are also involved in illegal activities according to media reports … let us petition to render them ollegal too!!!
    What utter nonsense!!!