Bitcoin ban India: Arun Jaitley threatened to discontinue BTC
BITCOIN could have just been DESTROYED after India’s finance minister Arun Jaitley vowed to ban cryptocurrency and discontinue the use of bitcoin. Will the BTC price now crash after India threatened a digital cash ban?
India’s government said it does not consider cryptocurrencies to be legal tender and will try tp phase out payments using coins such as bitcoin.
In a meeting yesterday, Mr Jaitley renewed India's commitment to ending the use of BTC and other cryptocurrencies.
The ban, he said, was India’s continuing fight against money laundering and the funding of terrorism.
He said: “The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payments system”.
However, he did not rule out looking further into blockchain technology.
He said: “The government will explore use of blockchain technology proactively for ushering in digital economy.”
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Ajeet Khurana, head of the Blockchain and Cryptocurrency Committee of India (BACC), tried to clarify a statement made by the Indian Finance Minister that seemed to suggest India would “eliminate” cryptocurrencies.
Mr Khurana argued that cryptocurrencies will not be banned, but they won’t be part of the “payment system” in India.
In an interview with Your Story, he said: “The 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.”
Will BTC now crash?
Cryptocurrencies could now be at risk after the announcement, amid the threat of bitcoin dumping or devaluation.
Anshul Vashist, Delhi-based support manager at the cryptocurrency exchange Coinsecure told Bloomberg: ”After today’s announcement, people are getting scared.
"We have seen some dumping of bitcoins."
Coinsecure has a volume of about 100 coins a day, he said.
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However cryptocurrency investor and influencer Oliver Isaacs said he was not convinced the so-called ban would have an effect on markets.
He told Express.co.uk: "With cryptocurrencies and blockchain technology going from strength to strength despite the volatile market conditions, I feel India’s threat to ban cryptocurrency will not have the devastating effects that some people are suggesting.
"A ban is unlikely to decrease the speed at which digital currency is moving, given the unprecedented growth in other countries, who currently show no signs of going down the same path as India.
"Blockchain technology, which is decentralised is a large and complex entity, which cannot be tamed by the actions of individual countries or single organisations, as we saw with Facebook banning Cryptocurrency adverts earlier this week.
"Blockchain is revolutionising the way the financial world operates, with many positive benefits for society and organisations across the world and I have a feeling India will reverse their decision soon just like South Korea recently did."
Cryptocurrency price: A year in charts
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Bitcoin prices in India’s exchange have been consistently higher than those internationally, largely due to India's capital control system which makes it difficult for citizens to buy BTC abroad.
While foreigners are unable to take advantage of the higher asking prices in India, according to Sathvik Vishwanath, founder of Indian bitcoin platform Unocoin.
He told the Financial Times that Bitcoin trading has surged in recent months, adding: "Early last year we were gaining about 10,000 new users each month.
“In December it was about 7,000 to 8,000 each day."
If the digital currency does end up facing a ban, it could mean a drop in sales that could send the Bitcoin price crashing
