bitcoin: Sebi sends foreign officials to study cryptocurrencies, initial offer of coins

The market regulator Sebi has sent its officials to foreign countries to study the first offers of coins and cryptocurrencies, a move that will help in understanding systems and mechanisms.

Cryptocurrencies are digital units in which encryption techniques are used for trading and these "currencies" operate independently of a central bank, while initial coin offerings are equivalent to initial public offers in equity markets.

The regulator organized study visits to the Japanese financial services agency; the United Kingdom's Financial Conduct Authority and the Swiss Financial Market Supervisory Authority "to study the first offers of coins and cryptocurrencies," said Sebi in his annual report for 2017-18.

Study tours "help engage with international regulators and gain a deeper understanding of systems and mechanisms".

In addition, Sebi has hosted a number of international organizations including regulatory bodies and corporate and ministerial delegations in the fiscal past.

"These meetings promote deeper levels of cooperation, facilitate a better understanding of the Indian securities market and facilitate further collaboration with visiting institutions," noted the Securities and Exchange Board of India (Sebi).

The government has already established an interdisciplinary committee chaired by Subhash Chandra Garg, secretary in the department of economic affairs, to examine the existing framework in relation to virtual currencies.

Other members of the group include Sebi President Ajay Tyagi and Deputy Governor of the Reserve Bank of India, B P Kanungo. The committee has yet to present its report.

In early July, the RBI had told the Supreme Court that allowing transactions in cryptocurrencies like Bitcoin would encourage illegal transactions and has already issued a circular prohibiting the use of these virtual currencies.

While the crypto-investors filed a complaint against the ban, the Supreme Court had refused to revoke the RBI ban to treat cryptocurrencies. The final hearing of the case is scheduled for September 11th.

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