Responding to a question in the Lok Sabha, Finance Minister Nirmala Sitharaman Monday said that the government has no proposal to recognise Bitcoin as a currency in the country. She also informed the Lok Sabha that the government does not collect data on Bitcoin transactions.
When asked whether the government has any proposal to recognise Bitcoin as a currency in the country, the Finance Minister replied, “No, sir”.
This development comes as the government plans to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 in the ongoing Winter Session of Parliament. The Bill seeks to ban all but a few private cryptocurrencies to promote underlying technologies while allowing an official digital currency by RBI.
MP Thirumaavalavan Thol asked the Ministry of Finance whether the government is aware of the cryptocurrencies that are traded in India and whether trading in cryptocurrency is legally permitted in India. He also asked whether the Government has allowed cryptocurrency exchanges as a legally permitted entity in India.
Pankaj Chaudhary, Minister of State (MoS) in the Ministry of Finance, responded stating that: “Government does not collect information on trading in cryptocurrency. Cryptocurrencies are unregulated in India. RBI has vide its circular dated May 31st, 2021, advised its regulated entities to continue to carry out customer due diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittance.”
It should be noted that Bitcoin was introduced in 2008 by an unidentified group of programmers. The digital currency is not tied to a bank or government and allows users to spend money anonymously. The coins are created by users who “mine” them by lending computing power to verify other users’ transactions. They receive Bitcoins in exchange.
(With inputs from PTI)
