indian finance minister said cryptocurrencies are not legal tenders in india
With Bitcoin making waves all over the world in the past few months, the government was expected to provide clarity on cryptocurrencies. Finance Minister Arun Jaitley has said in his Budget speech that the currency is illegal and the government was not going to to recognise it.
The rising craze for bitcoin, a cryptocurrency that has rocketed to shocking highs, has already come under the government's lens. Bitcoin can be an easy way to evade tax or snare unsuspecting small investors in ponzi schemes. The government has already begun a crackdown on illegal uses of this unregulated virtual currency.
However, Jaitley has announced that the government would adopt blockchain, the technology that supports cryptocurrencies.
The Reserve Bank of India (RBI) is already looking at the brave new world of cryptocurrency. The success of Bitcoin may have encouraged the central bank to consider its own cryptocurrency since it is not comfortable with this non-fiat cryptocurrency.
A group of experts at RBI is examining the possibility of a fiat cryptocurrency which would become an alternative to the Indian rupee for digital transactions. (reserve bank of india )RBI's cryptocurrency could be a part of creating its own Blockchain, a distributed digital ledger and technology that supports cryptocurrencies. State Bank of India has taken the lead in bringing lenders and tech companies together for using Blockchain technology to share information among banks which will eventually help prevent frauds and tackle bad loans which are almost one-fifth of banks' loan book. The SBI's initiative, christened Bankchain, is in partnership with IBM, Microsoft, Skylark, KPMG and 10 commercial banks.
However, Jaitley has announced that the government would adopt blockchain, the technology that supports cryptocurrencies.
after this news the price ofbtc is fluctuating too much on indian exchanges it ws around 7lakh10thousand rupees per btc in morning and after this news it came down to 5 lakh10 thousand rupees ...lets see hw dip it goes m ready to grab some more btc at cheap rate ...
Exact words from Mr. Jaitley:
The Government does not consider Cryptocurrencies "as Legal Tender or Coin" and will take all measures to eliminate the use of these Crypto Assets in Financing "Illegitimate Activities or a Part of the Payment System". (emphasis ours)
Wrong interpretation: Bitcoin is illegal.
Correct interpretation: Bitcoin cannot be used as legal tender. Bitcoin cannot be used for illegitimate activities.
after that he Blockchain and Cryptocurrency Committee (BACC) of the Internet and Mobile Association of India (IAMAI) is happy that the Finance Minister has recognized the importance and popularity of cryptocurrency, and has chosen to talk about it on budget day. As far as the exact content of what he said, we are neutral-to-positive about it. However, we are pained to see his words being misinterpreted and misreported. Hence we are issuing this clarification, as well as our position.
Mr. Arun Jaitley, Finance Minister of India said, ‘The Government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.’
ooking closely that means:
(i) Cryptocurrencies are not legal tender or coin
(ii) The Government will take all measures to eliminate use of these crypto-assets in financing illegitimate activities
(iii) The Government will take all measures to eliminate use of these crypto-assets as part of the payment system
Here is what we understand, and where we stand on all of these:
(i) During question hour in Rajya Sabha on Jan 2, 2018, the Finance Minister had made the exact same point, where he stated that, ‘bitcoins or such cryptocurrencies are not legal tender’. This has been the position taken by almost all Governments around the world, and we regard this statement quite neutrally. It is our understanding that only currency notes and coins are legal tender. That doesn’t make any comment on the ‘illegality’ of other assets. It must be emphasized that gold, stocks, bonds, and other such assets are also not ‘legal tender’. To extrapolate that to mean that such assets are ‘illegal’ is irresponsible.
It must be emphasized that gold, stocks, bonds, and other such assets are also not ‘legal tender’. To extrapolate that to mean that such assets are ‘illegal’ is irresponsible.
ii) Every citizen and business in this country should play their role in eliminating financing of illegitimate activities, regardless of whether such financing is done using legal tender, cryptocurrency, gold, or any other medium. We welcome this move by the Government, and want to wholeheartedly support the Government in this move. Our members already maintain a no-compromise approach to KYC (know your customer) and AML (anti money laundering) processes. We encourage the Government to work with our members, as we are committed to detect, report, and eliminate suspicious transactions in pretty much the same way as other institutions do. This will also generate confidence in our banking partners.
(iii) We understand the Government’s position in wanting to eliminate the use of crypto-assets as part of the payment system. Since we are committed to support every regulation that the Government brings in, we will work with the Government to help it achieve its stated objective.
When a platform as significant as the Union Budget speech mentions cryptocurrencies, it is clear that the sector is coming of age. We welcome this positive development, and see it as an important milestone in the journey to policy-clarity and consumer-education.