Cryptocurrency, Blockchain and the Union Budget 2018
Arun Jaitely, the finance minister of India, has formally presented the union budget 2018-19 in the lok Sabha today. While we are in no position to either analyze or comment on most of the schemes or announcements made today we need to clarify the stand the Government has taken on cryptocurrency since most of the main stream media has misinterpreted it.
Main stream media has been covering it as a “Ban on bitcoin” but in reality what Arun Jaitley has done today is re-iterate the same stand the government has had so far. In simpler terms – the status quo is being maintained.
No, bitcoin is not completely banned in India.
Following is the bitcoin related transcript from Arun Jaitley today:
“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 ”
The above words imply that cryptocurrency CANNOT be used as a legal tender in exchange of Goods & services. The same way you cannot use a currency from different country to buy goods/services in India.
This has been the situation in India since quite a while, it has always been illegal to use bitcoin or any other cryptocurrency to pay for good & services but it was speculated that it could become legal at some point in the future. Until the Government wants to revisit their decision the status quo is going to be maintained for the foreseeable future.
This however does not mean that trading crypto currency or holding it is banned or illegal. There are several exchange sites in India which have been running within the legal framework and they will continue to operate like before.
You are also free to exchange one cryptocurrency for the other (Bitcoin to ether etc.) without breaking the law.
It is also worth noting that Jaitley went on to add that “The Government will explore use of Blockchain technology proactively for assuring in Digital Economy.”
The Government seems to acknowledge the usefulness of the blockchain tech which powers cryptocurrency and will hopefully start embracing it in real use at some point in the future.