Finance Minister Nirmala Sitharaman on Monday said she is awaiting an approval from the Cabinet on bill on cryptocurrency as the proposed legislation is before it. The inter-ministerial panel on cryptocurrency under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose specific actions has already submitted its report.
It has recommended that all private cryptocurrencies, except any virtual currencies issued by state, will be prohibited in India. "Cabinet note is ready on cryptocurrency (Bill). I am awaiting Cabinet to clear that," she said during her interaction with the media here.
Meanwhile, the RBI has concerns on the cryptocurrencies traded in the market and has conveyed the same to the government. Underlining that both the government and the RBI are "committed to financial stability", RBI Governor Shaktikanta Das had said there are no differences between the central bank and the Finance Ministry on the matter, and "we should now await the final decision on the matter" from the Centre.
Das had said he has "reasons to believe" that the government is in agreement with the "major concerns" flagged by the RBI about the cryptocurrencies. The Supreme Court in March allowed banks and financial institutions from providing services related to cryptocurrencies by setting aside the RBI's 2018 circular which had prohibited them.
Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds, operating independently of a central bank.
A three-judge bench, headed by Justice R F Nariman, said the Reserve Bank of India (RBI) circular is liable to be set aside on the ground of "proportionality". "Accordingly, the writ petitions are allowed and the circular dated April 6, 2018 is set aside," said the bench, also comprising justices Aniruddha Bose and V Ramasubramanian.