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Bitcoin in India
Despite the Indian media alarmist reports, such as a well-known news anchor stating that bitcoin is to be banned according to Arun Jaitley the Indian Finance Minister, this is simply not true. What the Finance Minister Arun Jaitley actually said was, “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 (emphasis added) or as part of the payments system.”
Of course, like many countries, the Indian Government does not overtly recognize bitcoin as legal tender and consider it more in the asset class (although that has yet to be fully determined), and dissuading the public from using it as a payment instrument. Indeed the Indian tax authorities are, utilising the help of cryptocurrency exchanges to catch tax evaders with the issuance of tax notices to thousands of crypto currency traders.
But the Indian media chose to misinterpret his words for the sake of sensationalism. Quartz India, a mainstream publication, misinterpreted the statement to mean ALL crypto currencies would be banned. Reuters, not to be outdone, stated, “No-holds- barred attack on virtual currencies such as Bitcoin by Indian authorities.”
An attempt to correct a former statement by Fortune from. “Bitcoin Price Slides Again As India Announces Ban Plan” to “India Just Caused the Price of Bitcoin to Slide Again.” Simply replaced one doom and gloom statement with another.
When Jaitley was asked in an interview if a ban was contemplated, he stated, “We are discouraging people from using it now. There is a government committee that’s looking into it right now and they will announce their decisions and next steps after they are done.” That committee is the “Virtual Currency Committee’, an inter-disciplinary committee comprising of representatives from a number of ministries as well as those from the central bank and India’s biggest bank (also state-owned) tasked toward proposing a regulatory framework for cryptocurrencies in India. The committee was established by India’s Ministry of Finance in April 2017. To date, no findings have been made public yet.’
Meanwhile, business is flourishing in the crypto currency market. Exchanges offering crypto currency and trading services include BtcxIndia, Unocoin, and Coinsecure Zebpay, Koinex, and Bitcoin-India. Some do not charge but make their money on the spreads between buy and sell. The crypto currency market has grown exponentially over the past five years and there are now an increasing number of over the counter crypto shops and bitcoin ATMs in major cities.
Sathvik Vishwanath, chief executive Unocoin, one of India’s largest bitcoin exchanges told CCN, “We did not see any change in the stance of the government. We are pleased the authorities are taking action against illicit usage of cryptocurrencies but, otherwise, there is no reason for any panic. It’s business as usual at Unocoin.”
In fact India’s bitcoin industry confidence remains positive by the finance minister’s remarks on cryptocurrencies during a national address in delivering the nations’ budget. “When a platform as significant as the Union Budget speech mentions cryptocurrencies, it is clear that the sector is coming of age,” read a statement from the Blockchain and Cryptocurrency Committee of India. “We welcome this positive development, and see it as an important milestone in the journey to policy-clarity and consumer-education.”
In summary, do not be misled. India isn’t banning cryptocurrencies, nor their trading in the country. What is likely is that one it is established what bitcoin actually is, either a currency or an asset, then regulation to curb the use of bitcoin for illegitimate use will be formulated. Meanwhile the government is keen to rake of some cream from the top in the form of taxation, hardly a reason to ban bitcoin.
This article will be updated as news unfolds.
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