India Bans Cryptocurrency Transactions, But Interested in Blockchain Technology

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The Union Budget was presented in India today, 1st February. In his budget speech, Finance minster Arun Jaitley stated that the government will do everything to discontinue the use of bitcoin and other virtual currencies in India. He reiterated that India does not recognize them as legal tender, which means that payments in Bitcoin and other alt-coins will not be legal anymore.

“The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system,” Jaitley said.

“The government will now either come out with a legislative mechanism or make suitable amendment in existing legislation to ensure that dealing and trading in cryptocurrency is made illegal and to penalise entities and individuals who are involved in their trade and circulation,” said Monish Panda, founder of Monish Panda & Associates law firm.

This announcement comes after months of discussions on the existence of crypto payments in india. India, the most populated country in the world after China, houses a very large crypto-community. In fact, almost 1 in every 10 transactions takes place in India.

However, Jaitley has mentioned that the Indian government is interested in blockchain technologies and payments via the blockchain will be accepted.

Even though the government has declared crypto-trading and circulation as illegal, Indian cryptocurrency exchanges held out hope, arguing that the government would maintain some balance in its regulations.