Govt. panel looking into pros, cons of introducing an official digital currency in India

A government panel is examining all issues related to cryptocurrencies, including the pros and cons of the introduction of an official digital currency in the country.Cryptocurrencies are not recognised as legal tenders in the country and the issue of allowing trading in such currencies is being examined by the government, Union Minister Anurag Thakur said Monday.The Minister of State for Corporate Affairs told the Lok Sabha that no decision on licensing and authorising any entity or company to deal with Bitcoins or any other virtual currency has been made yet.The issue of permitting trading in cryptocurrencies is under examination by the government which has constituted an Inter-Ministerial Committee (IMC) under the chairmanship of Secretary, Department of Economic Affairs.[caption id="attachment_6861811" align="alignnone" width="1280"]

Facebook Libra. Image: Reuters.[/caption]“The committee, with representations from MeitY, RBI, SEBI, and CBDT is examining all issues, including the pros and cons of the introduction of an official digital currency in India and is working to develop a framework for regulating cryptocurrencies,” he said.“However, in absence of a globally acceptable solution and the need to devise a technically feasible solution, the Department is pursuing the matter with due caution,” he added.Further, the minister said it is difficult to state a specific timeline to come up with clear recommendations.In December 2017, the government clarified that cryptocurrencies are not legal tender and had also cautioned the public against the risks involved in investing in such currencies.The Reserve Bank of India (RBI), in April 2018, issued a notification regarding the prohibition on dealing in virtual currencies.According to the minister, an inspection of the books of ZEB IT Services Pvt Ltd to examine inter-alia the aspect of dealing in Bitcoin was carried out and action was taken for non-compliance with various provisions of the Companies Act.In a separate written reply, Thakur said the ministry has not taken any view with respect to amending Corporate Social Responsibility (CSR) rules under the Companies Act.“Need for any such amendment may arise if so recommended by the High-Level Committee on CSR 2018 and the same is accepted by the government,” he added.A certain class of profitable companies are required to shell out at least two percent of their three-year annual average net profits towards CSR activities in a financial year.