Finance Minister of India, Arun Jaitley, presented his fifth Union Budget on 1st Feb 2018. He had something for all those who were hoping to hear some announcement regarding the Bitcoins and the future of crypto currencies, but the news wasn’t that pleasing!
As the world is happily surfing over the high-low tides of crypto currency, Modi government seems unfazed and unimpressed with the concept.
Did he elude all possibilities?
Arun Jaitley said that Bitcoins are not a legal tender and do not have a place in the formal Indian economy. Hinting a firm stance over crypto currencies, he also said that Narendra Modi government would ‘eliminate the use of crypto currencies’ as the digital currency is being used for illegal transactions.
Bitcoin “a Ponzi scheme”:
Arun Jaitley compared Bitcoins with ponzi schemes and believes that there is a heightened risk of investment that could result in sudden and prolonged crash exposing the retail consumers and investors.
Indian crypto market:
The issue of crypto currencies was discussed in Rajya Sabha when DMK MP Kanimozhi said that India accounts for nearly 11 percent of the global trading in crypto currency. India is home to a large number of Bitcoin investors and traders, one in every 10 Bitcoin transaction in the world takes place in India. But Arun Jaitley has retorted his earlier stand on crypto currency which directly implies formalisation of the digital currency is still a distant dream.
Government’s take – timeline:
- On January 19, the Income Tax department sent tax notices to thousands of people who were dealing in crypto currencies after a nationwide survey indicated $3.5 worth transactions over 17 month period.
- The Reserve Bank of India has cited the risks associated with dealing in crypto currencies. Digital currencies are prone to losses arising out of hacking, loss of password etc., the lack of any authorized central agency to regulate the payments or to turn to for redressal of grievances. Moreover, there is no underlying of an asset for VCs, making the value a matter of speculation. Fourth being that the exchanges located in various parts of the world, making the law enforcement a tricky thing for the multiple jurisdictions available. Lastly, RBI said that trading in virtual currencies is subject the user to illicit and illegal activities since the VCs, can easily be used for illegal activities anonymously.
- The government sought public views on future of Bitcoin. Government’s official platform MyGov had asked, “Whether Virtual Currencies (VCs) should be banned, regulated or observed?” Nearly 4,000 submissions were made on the question.
A light at the end of the tunnel:
Arun Jaitley has announced bluntly that the Indian government is against cryptocurrencies; however, he has hinted a push for blockchain technology. Blockchains that are decentralised digital ledgers serves as the backbone of all cryptocurrencies. Arun Jaitley added that his government would explore all the possibilities of using blockchain to strengthen the Digital India campaign further.
Karnataka government announced its plans last year of using blockchain technology and said it was planning to bring out a white paper on “Blockchain Use in Governance” as a prelude to a separate policy.
Experts believe cryptocurrencies would revolutionalise the future. Would India be a part of this revolution? Well, as of now Indian government seems in no mood to take this ‘crypto bull’ by its horns.