The Union finance ministry is in the process of preparing norms for cryptocurrencies or virtual currencies, such as Bitcoin. The move has been impelled by the latter’s rising market size and investor base, apart from reports of related fraud. The government feels the industry needs some government oversight and can’t be left unregulated. A panel of bureaucrats will soon submit their recommendations on the subject. The panel is unlikely to recommend a ban on digital currencies. The global market capitalisation for virtual currencies is about $40 billion. Bitcoin trades at around $1,600 and is volatile. Another such currency, the Etherium, reached $100 a unit from $4 only 10 months before. The price of Litcoin is also rising.  In India, Bitcoin is traded around Rs.1 lakh a unit. The issue of regulating virtual currencies like Bitcoin and others is gaining seriousness as some frauds have come to light in recent past in India also. About a million investors are trading in Bitcoin India, mainly through five-odd exchanges. Indian Bitcoin prices are trading at premiums of five to 40 per cent compared to those abroad. Soon after demonitesation was announced, many Indians rushed to buy these and reportedly paid up to 40 per cent in premiums. Premiums are marginal now.

(Business Standard)