India’s government has become the latest to say that it doesn’t consider cryptocurrencies as legal tender and that it will take measures to ‘eliminate’ the use of them.
Speaking to lawmakers today, Arun Jaitley, India’s finance minister, said in his budget speech that:
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.
However, while he spoke out against the use of digital currencies such as bitcoin or ethereum, he did give praise to the blockchain, reports Bloomberg, adding:
The government will explore use of blockchain technology proactively for ushering in digital economy.
This announcement from Jaitley comes after months of speculation over the future of cryptocurrencies in India. Last month, it was reported that the country’s income tax department had issued tax notices to tens of thousands of digital currency investors following a nationwide survey.
According to the results from the survey, the nation’s citizens had conducted over $3.5 billion worth of trades and transactions over a 17-month period. This is despite repeated warnings from the country’s central bank, the Reserve Bank of India (RBI), about the risks of trading in cryptocurrencies.
Since the news from India bitcoin’s value has dropped below $10,000, to $9,490, representing a 7.84 percent drop in 24 hours, according to CoinMarketCap. Anshul Vashist, Delhi-based support manager at the cryptocurrency exchange Coinsecure, said that people are now getting scared that this will plummet bitcoin’s price down even further, adding:
We have seen some dumping of bitcoins.
Over the last few months India’s government and the RBI have expressed their concerns over the use of cryptocurrencies.
In November, the country’s central bank said that it wouldn’t be accepting bitcoin for its payments or settlements. At the time, rumours were circulating about a possible government panel preventing the use of digital currencies in India. Due to the fear that cryptocurrencies can be used for criminal activities, the panel had suggested that a campaign should be launched aimed at discouraging people from using and trading in them.
Yet, while measures have been discussed for quite some time the legal status of digital currencies in India remained in a grey area.
Jaitley’s announcement today, though, finally puts to rest any doubts remaining over the government’s stance.