There is a sudden outbreak of hysteria in India regarding the legal status of cryptocurrencies. So lets get a few things straight.
No! The finance minister hasn't declared bitcoin illegal and isn't going to end the crypto movement anytime soon.
Arun Jaitley has just killed India’s cryptocurrency party.
Quartz, a digital news agency based out of the US twisted the minister's advisory on cryptocurrencies in a bid to grab eyeballs. NDTV, an Indian media house soon caught wind of the article, adding to the frenzy.
Budget 2018 Bombshell for Bitcoin - Finance Minister Arun Jaitley Says Will Eliminate The Use Of Cryptocurrencies.
This minister's statement, has resulted in much speculation on whether cryptocurrency has been banned, or what is the government’s legal position on it.
Let's have a look at what he really said:
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.
It is evident that the Indian government is not against cryptocurrencies or their use. he payments system includes a lot of things like the settlement mechanism, and the banking system. In recent times, digital wallets and other payment mechanisms have been added to the entire scenario.
What the Finance Minister might be saying is that cryptocurrency is not considered to be a part of these payment systems. Similarly, gold is not part of a payment system, but people still barter assets like gold for goods, as long as both parties record the transaction. It is an asset barter transaction.
There is a little subjectivity on the matter. Can an individual swap cryptocurrency for another cryptocurrency?
We have to wait for clarification on what the Finance Minister meant when he mentioned payment system. In short, there is no news. The government has reinforced its earlier stance and there is nothing to freak about.