Why in News?
The government is considering the introduction of a regulatory regime for virtual currencies such as Bitcoins.
What is a bitcoin?
- Bitcoin is a type of crypto-currency.
- Crypto-currency is a digital currency that allows transacting parties to remain anonymous while confirming the transaction is valid.
- It is not owned or controlled by any institutions – government or private.
- Click here to know more.
What is the curent status of bitcoins in India?
- Bitcoins are classified only as movable property and more specifically as computer software.
- The government has not formally brought bitcoins under the defintions of currency or prepaid payment instruments.
- Neither did it make bitcoins illegal.
- It is thus right to say that currently the crypto-currency is neither illegal nor legal in India.
- The pros and cons of legalising them is currently debated among the government circles.
What are the benefits of legalising bitcoins?
- Trading of bitcoins would be brought under the stock market regulator, Securities and Exchange Board of India (SEBI).
- Bitcoins can be traded on registered exchanges which will promote a formal tax base. Returns from investment in Bitcoins would be taxed.
- Use of bitcoins for illegal activities such as money laundering, terror funding and drug trafficking can be checked.
- If any foreign payment is made through Bitcoins, it would fall under the purview of Foreign Exchange Management Act,
Source: The Hindu
