According to an official statement here on Monday, the committee headed by Economic Affairs Secretary Subhash Chandra Garg has submitted the report and the draft bill on banning of cryptocurrencies and regulating official currency.
The government would study it and consult departments and regulatory authorities concerned to take a final decision, it said.
"As for private cryptocurrencies, given the risks associated with them and volatility in their prices, the group has recommended banning them and imposing fines and penalties for carrying on of any activity connected with them in India," said the statement.
However, the government should keep an "open mind on official digital currency," it said.
As virtual currencies and its underlying technologies are still evolving, the group has proposed setting up of a Standing Committee to revisit the issues as and when required.
The report highlighted the positive aspect of distributed-ledger technology (DLT) and suggested various applications, especially in financial services, for use of DLT in India, the Finance Ministry statement said.
"The DLT-based systems can be used by banks and other financial firms for processes like loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market," it said.
The committee was set up on November 2, 2017 under the chairmanship of the Economic Affairs Secretary, with the Secretary for Electronics and IT Ministry, the Chairman of Securities and Exchanges Board of India (SEBI) and a Deputy Governor of the Reserve Bank of India as its members to study the issues related to virtual currencies and propose specific action to be taken in the matter.
( With inputs from IANS )