INDIA BUDGET 2018: BITCOIN?
The Central Banking authority, Reserve Bank of India (RBI) and the government of India have been against Bitcoin and cryptocurrencies to be used as a legal tender to exchange value. RBI has issued several warnings and cautioned the holders of cryptocurrencies including bitcoin regarding the risks involved since 2013.
On 1st February 2018, Mr. Arun Jaitely, Union Finance minister in his budget speech announced, “The government doesn’t consider cryptocurrencies as legal tender or coin and will take all measures to eliminate the use of these in financing illegitimate activities or as a part of the payment system.”
What are the implications?
That statement meant that the government doesn’t recognize Bitcoin and cryptocurrencies as a legal tender, and will take steps to crack down on the use of these currencies for illegitimate activities. However, the mainstream media couldn’t understand the literal meaning of what Finance Minister said and reported that Bitcoin has been Banned in India. This created panic amongst the Indian investors which further led to selling on few renowned Indian Bitcoin exchanges including Zebpay and Unocoin.
Further, in his speech, the Finance minister emphasized on the importance of the blockchain technology in digitizing the economy, as he said, “Distributed ledger system or the blockchain technology allows organization of any chain of records or transactions without the need of intermediaries.The government will explore the use of Blockchain technology proactively for ushering in a digital economy”.
After the budget speech, Mr. Jaitely in an interview also mentioned that the government wants to discourage the use of cryptocurrencies while there is no such ban on it.
Indian authorities have kept their stance regarding Bitcoin the same as before but are zealous regarding blockchain technology to be used in the economy. Although, an arm of RBI, the Institute of Development and Research in Banking Technology, an arm of RBI has been positive towards Blockchain technology, which is very evident in the white paper issued by them.
1. NewIndiaBudget : FM Arun Jaitley speaks exclusively with DD News on Budget 2018 (Feb, 2018)
2. Crypto Watch: Bitcoin Prices Fall Amid Reports Of India Crypto Regulation (Feb, 2018)
3. Press Release: RBI cautions users of Virtual Currencies (Feb, 2017) https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=39435
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