Three months from now, a committee constituted by India's Ministry of Finance is expected to submit its views on virtual currencies. The government of India has set up a committee, saying that the circulation of cryptocurrencies "has been a cause of concern", to look into the following aspects: (i) take stock of the present status of Virtual Currencies both in India and globally; (ii) examine the existing global regulatory and legal structures governing Virtual Currencies; (iii) suggest measures for dealing with such Virtual Currencies including issues relating to consumer protection, money laundering, etc; and (iv) examine any other matter related to Virtual Currencies which may be relevant. The committee is chaired by the Special Secretary (Economic Affairs) and will have representatives from Department of Economic Affairs, Department of Financial Services, Department of Revenue (CBDT), Ministry of Home Affairs, Ministry of Electronics and Information Technology, Reserve Bank of India, NITI Aayog and State Bank of India. This follows a question in Parliament about the legality of bitcoin, following which Minister of State for Finance Arjun Ram Meghwal had said that the Reserve Bank of India "has not given any license/authorization to any entity/company to operate such schemes or deal with Bitcoin or any virtual currency", and more pertinently, that "any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk." What happens next? Bitcoin is in that space where it is neither legal nor illegal: it is unregulated. The absence of a regulation doesn’t…
