Virtual currencies: ICAI to come out with concept paper

Virtual currencies are stored in digital or electronic format, making them vulnerable to hacking, loss of password and malware attack, which may also result in permanent loss of money.

A committee, chaired by Secretary, Department of Economic Affairs, is looking into all the issues related to virtual currencies. Image source: Reuters

Chartered accountants' apex body ICAI is looking into various aspects of virtual currencies and will come out with a concept paper on the same, according to its president Naveen N D Gupta.

There are rising concerns about investments in virtual currencies such as bitcoins, which have seen significant volatility in trading globally, while there is no framework yet in India to regulate such activities.

A committee, chaired by Secretary, Department of Economic Affairs, is looking into all the issues related to virtual currencies and crypto-assets.

The Institute of Chartered Accountants of India (ICAI) is also looking into the issue of virtual currencies. "We are coming out with a concept paper on virtual currency... We are developing accounting and auditing standards also but it takes time. It is too early to say anything as of now," Gupta told PTI. He formally took over as the president this week.

The institute's Digital Accounting and Assurance Board is looking into the matter.

In a notice regarding an upcoming webinar on 'Crypto- currencies & Block chain - Will they disrupt Accounting', the institute said crypto-currencies and block chain technology are game changers set to transform accounting and auditing world.

The webinar, to be held later this week, is to explore and examine the potential impact of emerging technologies of crypto-currencies and block chain on accounting, as per the notice.

Virtual currencies are stored in digital or electronic format, making them vulnerable to hacking, loss of password and malware attack, which may also result in permanent loss of money.

In his Budget speech on February 1, Finance Minister Arun Jaitley said the government does not consider crypto-currencies legal tender or coin and would take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.

"Distributed ledger system or the block chain technology allows organisation of any chain of records or transactions without the need of intermediaries... The government will explore use of block chain technology pro-actively for ushering in digital economy," he had said.

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