Yesterday on Feb 1, Indian Finance Minister Arun Jaitley delivered his budget speech for the fiscal year 2018. As it was expected, Mr. Jaitley did mention about virtual digital currencies and its probable use for illicit activities of money laundering and tax evasion.
Over increased involvement of Indian investors in cryptocurrency markets, the Indian government has been seen taking stern measures recently with its Income Tax department making on-site visits to the exchanges in search of any suspicious and dubious activities. Moreover, in the recent past, the banks have also tightened up the screws while choking deposits and withdrawals to a few suspicious crypto accounts linked to the exchanges.
Yesterday while delivering his budget speech, Mr. Jaitley said that the government will take every measure to eliminate the use of cryptocurrencies for any “illegitimate” activities. He also further stated that cryptos will be prohibited “as part of the payments system.”
As per the transcript published by Indian Media house LiveMint, Mr. Jaitley was quoted saying “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.”
The Indian Finance Minister has previously clarified that his government doesn’t consider cryptos to be a legal tender and also cautioned investors last months while investing in digital assets. He also said that the ministry is working in tandem with India’s central bank – The Reserve Bank of India – in order to form a policy framework to regulate the use of cryptos.
Although the finance minister has by and large remained critical on his views for cryptos, he appreciated the underlying blockchain technology in his speech. He said: “The Government will explore [the] use of blockchain technology proactively for ushering in [a] digital economy.”
Soon after his speech, a lot of fear, uncertainty, and doubt was created by other media houses and other sources, having over-read Mr. Jaitley. Some also made some far-fetched conclusions that the Indian government is planning to completely ban crypto trading activities by just having his two words “illegitimate” and “eliminate”.
Citing a lawyer named Monish Panda, founder of Monish Panda & Associates law firm, Quartz in its article quotes Monish saying “a legislative mechanism or… suitable amendment in existing legislation to ensure that dealing and trading in cryptocurrency is made illegal and to penalize entities and individuals who are involved in their trade and circulation. We will have to wait and watch as to what will be the final framework of such legislation.”
However, from within India’s crypto markets, the sources had a completely different story to tell. One of India’s popular cryptocurrency exchanges ‘Unocoin’ said that there has been “no change” in the operations with regards to cryptos, post the budget speech. On its Twitter feed, it wrote: “It is business-as-usual”.
— Unocoin (@Unocoin) February 1, 2018
Also, Ajeet Khurana, the newly appointed head of Blockchain and Cryptocurrency Committee of India (BACC) sounded quite positive after Mr. Jaitley’s speech. Mr. Khurana said: “Hearing the Finance Minister talk about Cryptocurrency on Budget day is clear indication of how important and widespread this technological innovation has become in India. BACC welcomes the statement and reaffirms our unstinting assistance to the Government, and all regulators, in helping evolve a robust ecosystem for Cryptocurrencies.”
However, the cryptocurrency market is seen entering a major correction as Bitcoin has slipped below $9000. The cryptocurrency has corrected by over 14% in last 24-hours and is currently trading at $8682.98, according to CoinMarketCap. It is not only Bitcoin but the entire crypto market is bleeding severely as the overall market valuation now is just $409 billion, a whopping $400 billion correction from its month high of $829 billion.