Bitcoin not a legal tender, not a recognised medium of exchange, says Jaitley

The minister said there are number of trading platforms for Bitcoins in India, but since its is not regulated, there is no credible source of information with respect to the investment products and volume of transaction.

Bitcoins or cryptocurrencies are not a legal tender in the country and are not recognised as a medium of exchange, corporate affairs minister Arun Jaitley said on Friday.

Defining Bitcoin, Arun Jaitley said it is a type of unregulated digital money that is issued and normally controlled by its developers and used and accepted among the members of the virtual community.(File)

“Bitcoin does not have a legal tender in India. However, it has presence in both in the public domain and in the unorganised markets,” Jaitley said in a written reply to the Lok Sabha.

Defining Bitcoin, Jaitley said it is a type of unregulated digital money that is issued and normally controlled by its developers and used and accepted among the members of the virtual community.

He said that there are number of trading platforms for Bitcoins in India, but since its is not regulated, there is no credible source of information with respect to the investment products and volume of transaction.

According to him, the virtual currencies (VCs) including Bitcoins do not have any underlying assets and their price is entirely speculative, which can expose the investors to heightened risk.

“...VCs have not been authorised by the government or Reserve Bank of India (RBI) by way of licence nor it is recognised as a medium of exchange,” the minister said.

On the actions being taken by the government to crackdown on the use of cryptocurrencies, he said that the government has already constituted a committee under the chairmanship of Secretary in Department of Economic Affairs to study all issues related with virtual currencies and recommend specific measures to address the concerns.

Given the growing Bitcoin trade, RBI has issued cautionary advice to the users, holders and traders of VCs about the potential, financial, operational, legal, customer protection and security related risks that they are exposing themselves to by investing in Bitcoin and/ or other VCs.

Further, RBI has also clarified that it has not given any licence/ authorisation to any entity/ company to operate such schemes or deal with Bitcoin or any virtual currency, the minister said.