The Union government has constituted a time-bound inter-disciplinary committee to come up with an action plan for dealing with virtual currencies so as to fix the regulatory gaps in the existing framework governing virtual currencies. The committee is required to submit its report within three months.
The circulation of virtual currencies, of late, has become a cause of concern. With respect to the virtual currencies, Reserve Bank of India (RBI) has also cautioned the users, holders and traders of Virtual currencies about the potential financial, operational, legal, customer protection and security related risks through press releases in December 2013 and February 2017.
Virtual Currencies, also called as digital/crypto-currencies, are a type of unregulated digital money that is neither issued by a central bank/public authority, nor is necessarily attached to a fiat currency, but is used and accepted among the members of a specific virtual community. They are capable of being transferred, stored or traded electronically. The examples of virtual currencies are Bitcoin, Litecoin, Darkcoin, Peercoin, Dogecoin, Primecoin etc.
The nine-member inter-disciplinary committee will be chaired by Dinesh Sharma, special secretary in the economic affairs department. The committee will also have representatives from the Department of Economic Affairs, Department of Financial Services, Department of Revenue, Ministry of Home Affairs, IT ministry, Reserve Bank of India, NITI Aayog and State Bank of India.
The committee is mandated to:
- Take stock of the current status of Virtual Currencies both in India and globally;
- Examine the present global regulatory and legal structures governing Virtual Currencies;
- Suggest measures for tackling the issues related to Virtual Currencies including issues like consumer protection, money laundering etc;
- Examine other relevant issues related to Virtual Currencies.