No proposal to recognise Bitcoin as currency in India: Govt

New Delhi, Nov 29: The central government has no plan to accept cryptocurrency as legal tender inIndia, said Finance minister Nirmala Sitharaman said on Monday.

In response to a question in Parliament, Sitharaman said, "The Government does not collect data on bitcoin transactions. The Government has no proposal to recognise bitcoin as a currency."

The statement assumes significance as the Narendra Modi government is se t to introduce the much-awaited The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 in Parliament during the ongoing Winter Session.

The bill seeks to "create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India." It also seeks to prohibit all private cryptocurrencies in India, however, it "allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses", as per the bill listed for introduction on the Lok Sabha website.

Currently, there is no regulation or any ban on the use of cryptocurrencies in the country. Against this backdrop, Prime Minister Narendra Modi, earlier this month, held a meeting on cryptocurrencies with senior officials, and indications are that strong regulatory steps could be taken to deal with the issue.

Recently, there have been a rising number of advertisements, featuring even film stars, promising easy and high returns on investments in cryptocurrencies in recent times, amid concerns over such currencies being allegedly used for luring investors with misleading claims.

Bitcoin, the world's first decentralized digital person-to-person cryptocurrency, is widely regarded as a revolution in today's currency and financial markets.

Bitcoin was created in 2009 by an anonymous programmer known only as "Satoshi Nakomoto." Bitcoin (BTC) is a cryptocurrency that is based on a blockchain, which is a tamper-proof distributed ledger.

The RBI had announced its intent to come out with an official digital currency in the face of the proliferation of cryptocurrencies like Bitcoin, about which the central bank has had many concerns.

Private digital currencies/virtual currencies/ cryptocurrencies have gained popularity in the past decade or so. Here, regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks.