Finance Ministry said to form panel to frame response to the bitcoin issue

Finance Ministry said to form panel to frame response to the bitcoin issue

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NEW DELHI: The Finance Ministry has formed a new panel to frame response on the bitcoin issue, media reports said on Friday. This came after the breakneck rise in the price of the cryptocurrency this year and the Income Tax Department surveying operations at the major e-currency exchanges across the country.

The media report further stated that RBI Deputy Governor B P Kanungo and Sebi Chairman Ajay Tyagi were on the panel. I-T secretary was also made part of the committee among other members.

The previous panel had suggested shutting down of those exchanges dealing in cryptocurrencies in the country.

On a year-to-date basis, the digital currency has advanced over 1,600 per cent to $17,040 on December 15 against $1,000 in January this year.

The Income Tax Department earlier this week conducted survey operations at major bitcoin exchanges across the country on suspicion of alleged tax evasion. They said various teams of the sleuths of the department, under the command of the Bengaluru investigation wing, visited the premises of nine such exchanges in the country including in Delhi, Bengaluru, Hyderabad, Kochi and Gurugram.

The government is currently in a huddle to find out how to create safeguards against the risks arising out of investing in an unregulated asset class like bitcoin.

Concerns also emanate from some unscrupulous entities indulging in illicit money-pooling activities — commonly known as ponzi schemes — with the promise of huge returns from investment in bitcoins and other variants, which they claim are minted through blockchain, a distributed ledger technology that was created to mint bitcoins and comprises of extremely complex algorithms with several thousand nodes for each chain.

Bitcoin, a virtual currency, is not regulated in the country and its circulation has been a cause of concern among central bankers the world over for quite a while now.

The Reserve Bank of India last week had cautioned users, holders and traders of virtual currencies, including bitcoins.

In March, the Finance Ministry had constituted an Inter-Disciplinary Committee to take stock of the present status of virtual currencies both in India and globally and suggest measures for dealing with such currencies.

Globally, in order to tap investor interest, Chicago-based derivatives exchange Cboe Global Markets launched bitcoin futures, enabling investors to get exposure to the currency via a large, regulated exchange.

[“Source-economictimes”]