India is considered as an important country for Bitcoin’s growth and future. The demonetisation drive sprung upon the nation late last year helped boost bitcoin usage like never before. With ATMs and banks running dry, people of the second largest population on Earth turned to digital currencies and mobile wallets to quench their cash thirst.
Concerned over the adverse impact that virtual currencies such as bitcoin can have on the Indian consumer, the Indian government recently setup a committee to examine the existing framework on digital currencies in the country. And now, according to the latest reports coming in, the Indian subcontinent is on its way to officially declare Bitcoin as cash before the end of summer and force a duty on the digital currency as the solution to its acknowledgment.
As of today, the usage of virtual currencies such as bitcoins in India is not authorised by the Reserve Bank of India (RBI). This could result in breach of anti-money laundering provisions. In fact, the RBI has time and again issued circulars cautioning holders, traders and users of virtual currencies in the country about the potential legal, security and financial risks that might arise due to these currencies.
The inter-disciplinary committee has been constituted by the department of economic affairs under the finance ministry and is being chaired by special secretary (economic affairs) and representatives from DEA, department of financial services, department of revenue (CBDT), home ministry, ministry of electronics and information technology, RBI, NITI Aayog and State Bank of India. The committee will be examining the existing framework of digital currencies and suggest ways to regulate the fast-growing segment so as to curb money laundering. But, the government has no plans of ordering a blanket ban on digital currencies in the country as being suggested by some reports in the media.
Seeing the growing bitcoin usage in the country as well as frequent panic created by government around it by issuing circulars and forming committees, India’s most popular bitcoin startups like Zebpay, Unocoin, Coinsecure and SearchTrade decided to come together and launch a self-regulatory body called as the Digital Asset and Blockchain Foundation of India (DABFI). The body works towards ensuring an orderly and transparent growth of virtual currency market in India.