HOME > BUSINESS > India bitcoin law not ready yet – Finance Ministry

India bitcoin law not ready yet – Finance Ministry

Finance Minister Arun Jaitley said there was no law on the use of bitcoin and similar crypto currencies in India, and users of such currencies may not get recourse to legal remedies for any damage.

However, Jaitely added that the government has set up a committee that is expected to come up with suggestions for a regulatory framework to address the new form of value exchange.

“At present, there are no regulations governing VCs including Bitcoin (BTC) in India,” the minister said today. “The Reserve Bank of India has not given any license or authorization to any entity or company to operate such schemes or deal with Bitcoin or any virtual currency.”

“The Reserve Bank of India has cautioned from time to time.. about the potential financial, operational, legal, customer protection and security related risks,” it added. After a recent warning, several India-focused online bitcoin exchanges shut down their operations.

Crypto currencies, unlike other forms of currencies such as e-wallets and gift coupons, do not require a central authority to keep track of who has how much.

Instead, they use a peer-to-peer technology known as blockchain to keep track of all transactions. Using the technology, the bitcoin network, for example, keeps multiple copies of all transactions that ever happened on the platform on multiple user devices at once.

As a result, it is practically impossible to manipulate or hack crypto-currencies by hacking into a central database or organization.

Crypto-currencies are currently used in India for money transfer as well as for payment of certain services, particularly to parties outside the country.

These transactions come with a new set of problems for the government as it bitcoins do not contain or track the identity of their owner at any point. Instead, anyone possessing the virtual wallet owns the bitcoins that are linked to that wallet in the distributed system.

It is almost like cash in that it is very difficult to trace who the real payee or payer is in a transaction. If the owner of the wallet decides not to come forward, it is next to impossible to figure out who owns a particular wallet.

This has led to a breakdown of sorts for the government’s ability to track money movements. With no way to track the movement of money, security agencies are also at a loss to trace illegal activities such as terror funding, human trafficking, tax evasion and bribery.

The government said concerns have been raised about the use of such currencies, and that a committee has been formed to study how other countries have addressed the problem and come up with suggestions for India.

“The objectives of committee, inter-alia, were to take stock of the present status of Virtual currencies both in India and globally; examine the existing global regulatory and legal structures governing Virtual Currencies; suggest the frame work for regulation of Virtual Currencies if considered including issues relating to consumer protection, taxation, money laundering among others; any other matter related to Virtual Currencies which may be relevant,” it said.

Jaitley did not clarify whether the committee has submitted its recommendations.

Follow ULTRA.news
Why no Jiocoin can ever take on Bitcoin Every few months, there is a new rumor surrounding Reliance Jio, the 4G operator that has taken the country by storm. A year ago, it was Jio DTH, which was supposed to put other DTH operators out of business, and now, it's Jiocoin, which is supposed to put virtual currencies l...
Bank of China, Iranian banks seek nod to open branches in India Bank of China wants to enter India Several foreign banks, including the Bank of China, have sought RBI's permission to set up operations in the country. Among those who have applied for permission to open a branch or office in the country are three banks from Iran, two fro...
State Bank of Mauritius gets banking license in India; Woori, PPF in queue SBM is the second largest in Mauritius State Bank of Mauritius has become the first foreign entity to receive a license to start a bank in India. The bank, along with DBS of Singapore, had received preliminary approval several months ago. It has now received the final b...
Make bitcoins illegal – Government of India Committee The international symbol for bitcoin Bitcoin users and investors in India could be in for tough times ahead as a high-level, interdepartmental committee set up by the government of India has urged it to crack down on such virtual currencies. The contents of the committee's...
Internet banking fraud in India rises 4 times in 1 year The number of frauds related to Internet banking and credit and debit cards in India has increased four fold in the last one year, according to data reported by the banks to the Reserve Bank of India. Banks have already reported 10,220 incidents under the RBI's Fraud Monitorin...
Inter-ministerial group on telecom woes dismissed crisis theory, blamed telcos for high debt The problem of high debt levels faced by some telecom companies in India was of their own making and the government had a limited to role to play in resolving the same, the inter-ministerial group set up to address the concerns of telecom sector found. The cash flow issues fa...
SBI, PNB & IDBI lead RBI’s list of Indian banks with NPAs The Reserve Bank of India has released the list of Indian banks and their non-performing assets as of September 30, 2017, the latest period for which financial data is available. The total non-peforming assets, or bad loans, has risen to 8.37 lakh cr -- a burden of around 20,0...
Bank NPA write-offs could rise 50% this year The pace of bad industrial debt written off by public sector banks in India increased substantially this year, according to RBI data. In the first six months of the financial year (April to September), public sector banks wrote off 36,510 cr of bad industrial debt, compared to...
RBI places Bank of India under ‘Prompt Corrective Action’ limits Bank of India said the Reserve Bank of India has placed it under the 'Prompt Corrective Action' framework, a set of restrictions aimed at preventing further deterioration in the health of a bank. It said the action followed an onsite inspection by the RBI. "This is in view ...
SBI Merger: Not a single employee laid off; No plans for VRS Not a single employee was laid off or removed as part of the merger of five associate banks with State Bank of India, the government said, adding that the bank had no plans to offer VRS options to its employees. "SBI has informed that no employee has been removed after merger...
NPA crisis: We’re not out of the woods yet – SBI official A senior State Bank of India official warned against assuming that the bad loan malaise affecting the Indian banking sector has started declining. Praveen Kumar Gupta, MD in charge of retail and digital banking, said one cannot directly draw conclusions by extrapolating trend...
RCom says majority of lenders oppose China bank’s insolvency petition Reliance Communications, the embattled telecom service provider from the Anil Ambani stable, said a majority of its lenders opposed the move by China Development Bank to move ahead with insolvency proceedings on the company. “At a Committee of Financial Creditors Meeting on 2...
Exchanges seek clarification from Bharti Airtel on Aadhaar misuse charges Stock exchanges in India have sought a clarification from India's largest telecom company by revenue, Bharti Airtel, on a report that it was under investigation by a government agency for allegedly misusing customer data to open bank accounts in their names. "(The) exchange ha...
Infosys launches inter-bank blockchain network Infosys said it launched Finacle Trade Connect, a network-based system of distributed record keeping for banks based on the block chain technology. A blockchain-based record is open to all participants and all participants have a copy of all the data. Moreover, all transactio...
Adani to enter e-commerce with grocery app ‘Fortune Online’ Adani Wilmar, the company that markets 'Fortune' brand of food products in India, is all set to enter the online grocery sales business with a new e-commerce portal and app called 'Fortune Online'. The company has hired Ahmedabad-based Infibeam to set up an app for the same. ...
IDBI Bank losses narrow, NII rises 18% QoQ IDBI Bank said Net Interest Income for September quarter improved by 3.63% compared to previous year and 18.19% compared to the June quarter. Net Interest Margin (NIM) stood at 2.17% for QE Sept 2017 showing improvement of 27 basis points as compared to QE Sept 2016 and 45 ba...
SIDBI and AU SFB to jointly lend to small businesses AU Small Finance Bank and Small Industries Development Bank of India (SIDBI) entered into an agreement to jointly lend to small businesses. Both will earmark a corpus of Rs 100 crore for lending under the ‘AU SIDBI Joint Financing Programme’ for FY18. The program will targ...
Ramco wins multi-million managed services deal from British MNC Bank Cloud-based enterprise software provider Ramco Systems said it won a multi-million dollar order from a big British MNC financial group to provide managed payroll services. Ramco will help the company, part of the FTSE 100 index, to consolidate its payroll operations in 14 co...
MobiKwik creates wallet app for bank even as rivals focus on payments bank Wallet app provider MobiKwik announced a tie-up with IndusInd under which it has launched an app exclusively for the bank's 10 mln customers. The move is in line with the app company's strategy to be a partner and solutions provider to traditional financial services companies...
JIO Wallet Offers: Paytm, Amazon, PhonePe give cashback on 399 recharge Wallet players like Paytm, Mobikwik, PhonePe and AmazonPay have come up with cash back offers for Reliance Jio users who want to take advantage of the Rs 399 recharge scheme valid till today midnight. Last week, India's largest wireless Internet provider said anyone rechargin...