Indian Supreme Court Seeks Govt’s Response on Petition to Regulate Bitcoin

News, Regulation | November 16, 2017 By:

The Supreme Court of India is looking toward the government for instructions amid petitions to regulate bitcoin.

On Tuesday, the Indian Supreme Court admitted a public interest litigation (PIL) seeking clarity on the regulators’ and government’s stance on bitcoin. Dwaipayan Bhowmick, the petitioner, said that the lack of any concrete [control] mechanism pending the regulatory framework in bitcoin has left a vacuum and which has resulted in unaccountability, which led to unregulated trading and transactions.

He also said that the money used to buy bitcoin from foreign locations is completely untraceable and may be used for trading and other financial activities directly from cryptocurrency accounts without any accountability.

Bhowmick claimed that despite the RBI’s call for caution against the use of digital currencies, domestic bitcoin exchanges in the country have been adding over 2,500 users a day and has reached 5 lakh downloads.

“It is submitted that certain countries have made bitcoin subject to their respective tax regimes, while a few other countries have designated it as a commodity, thereby making bitcoin subject to government regulation and accountable to exchequer but no such mechanism exists in India till date,” said Bhowmick.

Bhowmick said that he wants the ministries of finance, law & justice, and electronics & IT, Securities and Exchange Board of India, the Reserve Bank of India (RBI), the income tax department, and the enforcement directorate to regulate the use of bitcoins.

Last month, RBI Deputy Governor NS Vishwanathan said that the central bank was preparing a policy on the use of cryptocurrency in the country. The central bank is also researching fiat cryptocurrencies to develop a digitized version of the rupee, India’s fiat currency.