The government on Monday sought public opinion on whether Bitcoin, recently in news for hackers demanding this mode of payment to rectify Ransomware encrypted data on computers, be banned in India.
"Whether Virtual Currencies (VCs) should be banned, regulated or observed?,” the government asked on its website www.mygov.in. Suggestions can be given by May 31, it said.
In case VCs are suggested to be regulated, what measures should be taken to ensure consumer protection or to promote its orderly development?
It has also sought to know from the citizens which appropriate institution(s) should monitor/regulate the VCs?
In the wake of a phenomenal rise in the value of the anonymous currency, the government has sought to know from the people what should be the effective self-regulatory mechanism which can protect consumers.
Bitcoin is a form of digital currency, created and held electronically. No one controls it, no one regulates it. Bitcoin does not exist in any printed form, but produced online. It hit a record high on Friday with one unit trading above $2,000 on bitcoin trading platform BitStamp.
RBI advisory
Worried over taxation, security risks, losses due to the volatility and money laundering, the Reserve Bank of India had late last year issued an advisory prompting some Indian bitcoin traders to suspend their operations.
The government for its part had set up a committee headed by finance ministry in March this year to examine the current status of virtual currencies in India and abroad and suggest measures for dealing with such currencies, including issues relating to consumer protection and money laundering.
The committee has representatives from the Ministry of Home Affairs, Ministry of Electronics and Information Technology, Reserve Bank of India, NITI Aayog and State Bank of India.
Ban in China
Japan recognises bitcoins, while United States and Canada support the currency. Switzerland says it may treat bitcoin as foreign currency, but China had banned its banks from trading recently.