Arun Jaitley Says India Will Ban Cryptocurrencies
Arun Jaitley, India’s Finance Minister, has announced that his government will do everything in its power to ban Bitcoin and other cryptocurrencies. The announcement came as Mr. Arun delivered his annual budget speech on February 1st. The finance minister stated that India does not consider cryptocurrencies to be “legal tender”. However, Mr. Arun went on to say that India will support the use of blockchain technology, a response that has become common among regulators and larger companies.
Jaitley said that cryptos have the potential to be used in “financing illegitimate activities”. Many other world leaders have expressed similar concerns, and have attempted to place restrictions on cryptos. If India outlaws cryptos altogether, then it would be detrimental for the world’s cryptocurrency market. This is because around 10% of all bitcoin transactions are processed in India.
New Laws to Ban Crypto In India
Monish Panda, an Indian Disputes lawyer, has said that India will be introducing new legislation, or making amendments to existing laws, in order to make it unlawful to engage in crypto trading, or using them in any other way. He also noted that organizations or individuals who are caught dealing in cryptos will be penalized.
Meanwhile, Mr. Arun pointed out last year that India had not taken any measures to regulate cryptocurrencies. He also told the country’s parliament that the Reserve Bank of India (RBI) had not issued any crypto-related licenses to companies or individuals. Moreover, the RBI had expressed its disapproval of the use of cryptocurrencies. In fact, Mr. Arun and his finance ministry referred to cryptocurrencies as Ponzi schemes. Furthermore, Indian authorities discouraged people from investing in cryptos, claiming that they could lose all their funds in a volatile market that could crash at any time.
Growth and Future of India’s Crypto-Market
Although India’s finance minister left little doubt that India’s crypto-market will suffer from the scrutiny of regulators, the country’s crypto exchanges still expressed hope. They think that the government might eventually adopt a more balanced approach when it comes to the legalization and regulation of cryptocurrencies.
Notably, bitcoin prices are usually higher on India’s local crypto-exchanges compared to the average international rates. This is because of the country’s capital control system, which is designed to prevent locals from buying bitcoins through foreign markets. Despite these controls, bitcoin trading in India has been on the rise. Sathvik Vishwanath, the founder of Unocoin, a popular Bitcoin platform, stated that last year his platform had been attracting approximately 10,000 new users per month. This number increased dramatically to more than 7,000 per day during the month of December 2017.
Unfortunately, the boom in India’s crypt0-market might be short-lived, unless the nation’s regulatory authorities decide to take a more friendly approach to cryptocurrencies.