Who among the following is the Chairman of the Interdisciplinary Committee constituted recently by the Government of India to examine framework for virtual currencies ?
- (a)Secretary, Department of Financial Services
- (b)Special Secretary, Department of Revenue
- (c)Special Secretary, Department of Economic Affairs
- (d)Deputy Governor, Reserve Bank of India
Correct — C, Special Secretary, Department of Economic Affairs. The Government of India set up the inter-disciplinary committee in April 2017 under Dinesh Sharma, then Special Secretary in the Department of Economic Affairs in the Ministry of Finance. Its brief was to take stock of the position of virtual currencies in India and abroad, to examine the regulatory and legal frameworks other countries had adopted, and to recommend measures on issues including consumer protection and money laundering. It was asked to report within three months and submitted its report to the Department of Economic Affairs in August 2017.
- (a)Secretary, Department of Financial Services — The Department of Financial Services was represented on the committee, since banks and payment systems were squarely involved, but it did not chair it. That department's own remit is banks, insurance and pensions rather than the macroeconomic and policy questions the committee was set up to answer.
- (b)Special Secretary, Department of Revenue — The Department of Revenue was also on the committee, because taxation and the tracing of money were part of the question, but again as a member and not as chair.
- (d)Deputy Governor, Reserve Bank of India — The Reserve Bank was represented too, and it went on to act on its own account in 2018, but this was a government committee rather than a central bank one. Chairing it fell to the finance ministry department that handles currency and financial-sector policy.
The Department of Economic Affairs is the arm of the Ministry of Finance responsible for economic and financial policy, including currency and coinage, the capital markets and India's dealings with international financial institutions. A question about the framework for a new form of money therefore lands naturally in its lap, and its Special Secretary chaired the nine-member committee, which drew members from the Department of Economic Affairs, the Department of Financial Services, the Department of Revenue, the Ministry of Home Affairs, the information technology ministry, the Reserve Bank of India, NITI Aayog and the State Bank of India.
Anchor this to the September 2017 examination and note how far the story has since moved. In April 2018 the Reserve Bank barred the entities it regulates from dealing in virtual currencies; in March 2020 the Supreme Court set that circular aside, and cryptocurrency trading has been treated as permitted though not formally regulated since. The government has pursued a state-issued digital rupee while remaining wary of private currencies. So the 2017 committee should be read as the first step of a long process rather than as the settled position.
- The inter-disciplinary committee on virtual currencies was constituted in April 2017 under the Special Secretary, Department of Economic Affairs.
- It had nine members, drawn from the Department of Economic Affairs, Department of Financial Services, Department of Revenue, Ministry of Home Affairs, the information technology ministry, the Reserve Bank of India, NITI Aayog and the State Bank of India.
- Its terms of reference covered the status of virtual currencies in India and globally, foreign regulatory frameworks, consumer protection and money laundering.
- It reported to the Department of Economic Affairs in August 2017.
- The Reserve Bank barred regulated entities from dealing in virtual currencies in 2018, and the Supreme Court revoked that ban in March 2020.
- April 2017 — inter-disciplinary committee constituted under the Special Secretary, Department of Economic Affairs
- August 2017 — the committee submits its report to the Department of Economic Affairs
- April 2018 — the Reserve Bank bars the entities it regulates from dealing in virtual currencies
- March 2020 — the Supreme Court revokes the Reserve Bank's ban
The 2017 committee was chaired from the Department of Economic Affairs — option (c) — and was the first move in a much longer sequence.
- Assuming the Reserve Bank chairs every committee that touches money; this was a government committee chaired from the finance ministry.
- Confusing membership with chairmanship — four of the four options were represented on the body, but only one chaired it.
- Reading the 2017 position as the current one; the legal landscape changed in 2018 and again in 2020.
NDA sets committee-to-chairman and scheme-to-ministry questions regularly; the reliable preparation is to know which department owns which subject.
With reference to 'Bitcoins', sometimes seen in the news, which of the following statements is/are correct? 1. Bitcoins are tracked by the Central Banks of the countries. 2. Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with a Bitcoin address. 3. Online payments can be sent without either side knowing the identity of the other. Select the correct answer using the code given below.
- (a) 1 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Answer(b) 2 and 3 only
Sets out the properties that made a committee necessary — a virtual currency moves between addresses without a central bank tracking it and without either party knowing the other, which is exactly what raised the consumer-protection and money-laundering questions in the committee's brief.
- practice — not a real PYQ
Currency and coinage policy at the Union level falls under which department of the Ministry of Finance?
- (a)Department of Revenue
- (b)Department of Expenditure
- (c)Department of Economic Affairs
- (d)Department of Financial Services
Answer(c) Department of Economic Affairs — it handles economic and financial policy including currency.
- practice — not a real PYQ
The Reserve Bank's circular barring regulated entities from dealing in virtual currencies was set aside by the Supreme Court in
- (a)March 2018
- (b)March 2020
- (c)March 2022
- (d)March 2024
Answer(b) March 2020 — the Court revoked the ban, leaving trading permitted though not formally regulated.