Panel for banning of cryptocurrencies

New Delhi: An inter-ministerial committee has suggested banning of private cryptocurrencies and recommended fines and penalty for carrying out any activities related to them in the country, an official release said on Monday.

The government had constituted an inter-ministerial committee (IMC) on November 2, 2017, under the chairmanship of the economic affairs secretary, with the secretary of the Ministry of Electronics and Information Technology, Sebi chairman and an RBI deputy governor as members to study the issues related to virtual currencies, and propose specific action.

"As for private cryptocurrencies, given the risks associated with them and volatility in their prices, the group has recommended banning of the cryptocurrencies in India and imposing fines and penalties for carrying on of any activities connected with cryptocurrencies in India," the release said.

The report said that other than Bitcoin, several other cryptocurrencies have emerged including Ethereum, Ripple and Cardano. As of now, there are around 2,116 cryptocurrencies, with a market capitalisation of $119.46 billion, the report said.

The committee has also suggested a draft legislation - the Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019.

This report and the draft bill will now be examined in consultation with all the departments concerned and regulatory authorities, before a final decision is taken by the government, the release said.

Meanwhile, the report has also highlighted the positive aspect of distributed-ledger technology (DLT) and suggested various applications, especially in financial services, for use of DLT in India.