Bitcoin that has become a news in the whole world since last two years is facing tough times in India as the India government has made it an illegal tender. The government along with all major Indian financial institutions have said that Bitcoin is an illegal tender and the person dealing with it should do it at its own risk. What basically is happening today is that the media has misreported the statement. Here is what the FM said.
The government does not consider cryptocurrencies as 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,” Finance Minister of India Arun Jaitley said in his statement during presenting the annual Union Budget on February 01, 2018.
Explanation of the Statement and its Implications:
At present there is no rule or regulation under the Indian law regarding Bitcoin. The FM has stressed on the word illegitimate activities which means that he indicated that the government will take required measures against people who are using such cryptocurrencies for tax evasion, hawala or any other illegitimate activities.
Claim that it is not Illegal: The Truth
While the above statement you read says in the popular media that Bitcoin or cryptocurrencies is illegal but it is not. The finance minister said that the government doesn’t consider Bitcoin as a legal tender but it doesn’t mean from this statement that it would be illegal to use Bitcoin. Legal tender is something on which the government guarantees protection whereas an illegal tender is something where you own it or trade it on your own risk.
So it is now clear that the FM has not made dealing with cryptocurrencies as illegal but has just said that people doing illegitimate activities using bitcoin and their likes should be dealt strictly and the government will take measures to reduce and eliminate it.
Also, read – Bitcoin legal status by country
Future of Cryptocurrencies in India:
Well, the future of cryptocurrency in India is in bleak position as of now. Pro crypto people are saying that it should be legalized while the opposition wants a ban. What is interesting here is that the finance minister has said the government will be exploring the Blockchain technology that Bitcoin or any other cryptocurrency uses. FM said that they will explore the usage of Blockchain technology to add muscle to a digital economy.
It is certain that today or tomorrow the government will come with something close to Bitcoin or a crypto coin of its own like a Bharatcoin. There was a rumor that Reliance Jio is coming up with Jio coin which was found to be baseless. It is also reported that Sahara India may come up with Sahara Coin which will also use the same technology which Bitcoin uses. Only time will tell where it will lead to. As of now, one should hold up their breaths for the right time as it will take a while for the government to realize the importance of Bitcoin or any other cryptocoin. It is likely that the government may come with an India version of Bitcoin.