The government will soon bring a bill on crypto currencies as existing laws are inadequate to deal with issues concerning them, Minister of State For Finance Anurag Thakur told Rajya Sabha on Tuesday.
Replying to a question in the Upper House, Thakur said regulatory bodies like RBI and Sebi do not have any legal framework to directly regulate crypto currencies as they are not currencies, assets, securities or commodities issued by identifiable users.
"The existing laws are inadequate to deal with the subject," he said.
The government had formed an Inter-Ministerial Committee which has given its report on issues related to virtual currencies. There was also a meeting of the Empowered Technology Group. The Committee of Secretaries chaired by the Cabinet Secretary has also given its report.
"A bill (on crypto currencies) is being finalised and it will soon be send to the Cabinet. We will soon be bringing a bill," Thakur said.
Earlier, Union Finance Minister Nirmala Sitharaman too had said that a High-Level Inter-Ministerial Committee has been constituted in this regard. In its report, the report stated that "all private cryptocurrencies, except any cryptocurrency issued by the State, be prohibited in India. The Government would take a decision on the recommendations of the IMC and the legislative proposal, if any, would be introduced in the Parliament following the due process."
In view of the risks associated with Virtual Currencies (VCs), including Bitcoins, the Reserve Bank of India (RBI) through a circular in April 2018, had advised all the entities regulated by it not to deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs.
However, Supreme Court, vide judgement dated March 4, 2020, had set aside the RBI's circular.
To another question regarding Chinese companies in the country, the minister said as of now, there are around 92 companies registered in the country. Out of them, 80 Chinese companies are actively working in India.
Electric automaker Tesla said Monday that it has invested around USD 1.5 billion in Bitcoin and it plans to begin accepting the digital currency as payment for its high-end vehicles soon.
The price of Bitcoin soared 15.4 per cent to around USD 44,500 Monday in reaction to Tesla's announcement, according to CoinBase.
The California-based electric car maker headed by Elon Musk revealed the new strategy in a filing with the US Securities and Exchange Commission, saying its investment in digital currency and other "alternative reserve assets" may grow.
Bitcoin has drawn enthusiasts for its scarcity and security, but the volatile digital currency still is not widely used to pay for goods and services.
It's mostly been a store of value, like gold, with some limited merchants like Overstock accepting bitcoin for payment.
It's also used by those distrustful of the banking system or criminals seeking to launder money.
(With inputs from PTI)