The government is considering the introduction of a regulatory regime for virtual or crypto currencies, such as Bitcoin, that would enable the levy of the Goods and Services Tax on their sale.

• The new regime may possibly bring their trading under the oversight of the stock market regulator, Securities and Exchange Board of India (SEBI).

Purpose:

• To treat such currency in a manner similar to gold sold digitally so that it can be traded on registered exchanges in a bid to “promote” a formal tax base, while keeping a tab on their use for illegal activities such as money laundering, terror funding and drug trafficking.

About Crypto Currency:

Crypto-currency that is planned to be brought under the regulatory regime is a digital currency which allows transacting parties to remain anonymous while confirming that the transaction is a valid one.

• It is not owned or controlled by any institution – governments or private.
• There are multiple such currencies — bitcoin, ethereum, ripple are some of the popular ones.
• Currently, they are neither illegal nor legal in India.
• Bitcoins were in the news recently when during the two global cyber ransomware attacks — WannaCry and Petya — attackers sought about $300 in bitcoin as ransom.
• Crypto-currency can also be used for a lot of legal activities — such as booking tickets, buying coffee or fast food, depending of which retailers accept such currency.
• Blockchain is basically a digital public ledger that records every transaction. However, the involved parties can remain anonymous and they transact under an id.
• Bitcoin is just one of the applications for the technology, whose use in being tested across industries, particularly those that rely on intermediaries such as land record registry.