New Delhi | Jagran Business Desk: The Ministry of Finance in a written reply in Lok Sabha on Monday (November 29) said that the government of India does not collect data on Bitcoin transactions and it has no proposal to recognise Bitcoin as a currency in the country. The ministry made it very clear that the central government has no plan to accept cryptocurrency as legal tender in India.

Replying to the question in the House, whether the government has any proposal to recognise Bitcoin as a currency in the country, Finance Minister, Nirmala Sitharaman said "No, sir".

Bitcoin is a digital currency that allows people to buy goods and services and exchange money without involving banks, credit card issuers or other third parties. It was introduced in 2008 by an unidentified group of programmers as a cryptocurrency as well as an electronic payment system. It is reportedly the first decentralised digital currency where peer-to-peer transactions take place without any intermediary.

Meanwhile, the government plans to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 in the ongoing Winter Session of Parliament. The Bill seeks to ban all but a few private cryptocurrencies to promote underlying technologies while allowing an official digital currency by RBI.

Through the cryptocurrency and Regulation of Official Digital Currency Bill, 2021, India aims to make a framework for the official digital currency that will be issued by the Central bank. The step has been taken as several regulatory bodies have voiced "serious concerns" about private cryptocurrencies and its impact on the Indian economy.

"RBI has been examining use cases and working out a phased implementation strategy for the introduction of Central Bank Digital Currency (CBDC) with little or no disruption," said Ministry of Finance in a written reply in Lok Sabha.

"Introduction of CBDC has potential to provide benefits,like reduced dependency on cash, higher seigniorage due to lower transaction costs, reduced settlement risk. It can lead to a more robust, trusted,regulated & legal tender-based payments option," it added.

For the unversed, In 2018, India effectively banned crypto transactions in the country. However, the Supreme Court struck down the restriction in March 2020. Various other countries, including China, Bangladesh, Russia, Egypt, Morocco, and Nigeria have also banned cryptocurrency in their markets.

Posted By: Sugandha Jha