Finance minster Arun Jaitley, in his budget speech today (Feb. 01), stated that the government will do everything to discontinue the use of bitcoin and other virtual currencies in India. He reiterated that India does not recognise them as legal tender and will instead encourage blockchain technology in payment systems.
“The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system,” Jaitley said.
This declaration comes after months of speculation over the fate of cryptocurrencies in India, home to a large number of bitcoin traders and investors. In fact, one in every 10 bitcoin transactions in the world takes place in India.
“The government will now either come out with a legislative mechanism or make suitable amendment in existing legislation to ensure that dealing and trading in cryptocurrency is made illegal and to penalise entities and individuals who are involved in their trade and circulation,” said Monish Panda, founder of Monish Panda & Associates law firm. “We will have to wait and watch as to what will be the final framework of such legislation.”
Over the last few months, the government and the Reserve Bank of India have repeatedly expressed their discomfort over bitcoin and other e-currencies. Late last year, the finance ministry dubbed them a ponzi scheme…