Indian Finance Minister Drops A Bomb, Signals Cryptocurrency Crackdown

Indian Finance minister Arun Jaitley, in his budget speech today (1st February 2018), stated that the government will do everything to cease the use of bitcoin and other cryptocurrencies in India. He said that India does not consider them as a legalized tender and as an alternative will support blockchain technology in payment systems. Jaitley said: “THE GOVERNMENT DOES NOT RECOGNIZE CRYPTOCURRENCY AS LEGAL TENDER OR COIN AND WILL TAKE ALL MEASURES TO ELIMINATE THE USE OF THESE CRYPTO ASSETS IN FINANCING ILLEGAL ACTIVITIES OR AS PART OF THE PAYMENTS SYSTEM,” This declaration comes after months of assumptions over the destiny of cryptocurrencies in India, which homes to a large number of bitcoin traders and investors. According to the recent report, one in every 10 bitcoin transactions in the world takes place in India. Over the last few months, the Indian government and the Reserve Bank of India have constantly expressed their discomfort over bitcoin and other cryptocurrencies. Last year, the finance ministry called them a ponzi scheme. “There is a real and sharp risk of investment bubble which can result in abrupt and prolonged crash exposing investors, especially retail customers losing their hard-earned money,” the ministry had said. At the same time, the Narendra Modi government had also declared to set up a committee to understand the implications of cryptocurrencies and to establish the regulations surrounding them. There are number of cryptocurrency exchanges in India like Koinex, Zebpay, and Unocoin. For now, there are no such reactions from their end. “Nothing new was quoted by our Finance Minister in the budget declaration today. It was a repetition of the same old statement while the industry was expecting transparency over taxation and it’s regulation from the Government,” says Shivam Thakral who is the co-founder and CEO of Delhi-based BuyUcoin exchange. Finance minister Arun Jaitley’s stand today should now put to rest doubts over the government’s approach.