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The panel on cryptocurreny, headed by Economic Affairs Secretary Subhash Garg, is expected to submit its report within the next two months. The report will contain regulations, likely in form of a draft law, on how to deal with cryptocurrencies, including bitcoin. While cryptocurrencies are illegal, the government and regulators are aware of the need to set the template for a cashless future, government officials told Business Standard. “Bitcoin, or any other cryptocurrency, is just an algorithm, which lacks sovereign backing, and hence fails the standard definition of what a currency should be. It is akin to a Ponzi scheme, but there could be a time in future when sovereign currencies are in an algorithm form,” said one of the officials cited above. Another official said the Garg panel report will be out by mid-April.
According to website buybitcoin, there are 11 bitcoin exchanges in India. The Subhash Garg panel was set up in December to study the impact of cryptocurrencies and come up with recommendations to regulate them. Other members of the committee include Securities and Exchange Board of India (Sebi) chairman Ajay Tyagi and Reserve Bank of India deputy governor BP Kanungo. In his 2018-19 Budget speech on February 1, Finance Minister Arun Jaitley had said: “The government does not consider cryptocurrencies legal tender or coin, and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payment system.” In his speech, Jaitley also said the Centre will explore the uses of blockchain, the encrypted data structure on which cryptocurrencies are built. “The biggest advantage of blockchain, as of now, is that data cannot be tampered with. It is highly encrypted. We will examine the use of such technology,” said the second official quoted above.