Inter-Ministerial Committee banned Cryptocurrency

Published on July 23, 2019
Current context: Government’s inter-ministerial committee on virtual currencies has proposed banning of private cryptocurrencies in India
The Inter-Ministerial Committee banned Cryptocurrency
  • The committee was headed by finance secretary Subhash Chandra Garg, MEITY secretary Ajay Prakash Sawhney, SEBI chairman Ajay Tyagi and RBI deputy governor B.P. Kanungo as its members
  • The committee proposed a draft bill “Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019"
  • The group has proposed that the government may establish a standing committee to revisit the issues addressed in the report
  • It has suggested the use of Distributed ledger technology (DLT) or Blockchain in India by banks and other financial firms for processes such as collateral management, loan-issuance tracking, claims management in insurance and reconciliation systems in the securities market and fraud detection
  • It has taken a lenient view on the government launching an official digital currency
  • Former finance minister Arun Jaitley, in his budget speech 2018, said clearly on cryptocurrencies: “The government does not consider cryptocurrencies as legal tender or coin and will take measures to eliminate it in financing illegitimate activities or as part of the payment system. The government will focus on exploring the blockchain technology proactively for ushering in the digital economy."

Question: 

Q.1 Which statement is correct about the legality of cryptocurrency in India?
a. It is considered as a legal tender money
b. It is accepted in financial transactions and banks
c. Both a & b
d. No statement is correct

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