India turns back on Bitcoin; plans to embrace another one?

The Finance Minister has revealed the plans and schemes to benefit the nation in the Union Budget. So was the discontinuation of Bitcoin.

In an effort to curb the proliferation of cryptocurrencies like Bitcoin in India, Arun Jaitley said the government will eliminate virtual currencies’ usage for illegitimate financing.

“Cryptocurrencies are not legal tender and the government discourages its use. However, the government will look at the utilization of Blockchain (a distributed digital technology that supports cryptocurrencies),” Jaitley said in his Budget speech in Parliament.

Jaitley has repeatedly said that such digital currencies were not legal tender and people dealing with them would not get any legal protection. 

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However, industry experts urged him to regulate, not curb, them.

Bipin Preet Singh, Co-founder of e-wallet MobiKwik, reacted that “the government should consider regulating cryptocurrencies than curbing their use entirely”.

Neither the government nor the Reserve Bank of India (RBI) has authorized any virtual currency as a medium of exchange till date but the momentum for such virtual currencies is catching up rapidly in India like other countries.

“The announcement on the cryptocurrency should not be misinterpreted. The intention is more likely to regulate the circulation to avoid its use for illegal transactions,” noted Rashmi Deshpande, Associate Partner, Khaitan & Co, a leading law firm.

READ ALSO: Union Budget 2018: have the NRI’s been forgotten?

BITCOIN AND ITS FALL

Since reaching a peak of almost $20,000 in early December after the introduction of futures contracts on regulated exchanges in the U.S., a series of negative news has buffeted Bitcoin and rival cryptocurrencies, with losses intensifying since the start of 2018.

Bitcoin’s January slide knocked $44.2 billion off the $200 billion in market value generated in all of 2017, the biggest one-month loss in dollar terms in the short history of digital assets.

China — home to the world’s biggest community of bitcoin miners — is also cracking down on cryptocurrency activity.