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Indian Finance Ministry Panel Suggests Discouraging People from Using Bitcoin

Last Updated March 4, 2021 4:58 PM
Rebecca Campbell
Last Updated March 4, 2021 4:58 PM

In April, India’s government set up an interdisciplinary committee that included among others, the central bank, to examine the framework surrounding virtual currencies like bitcoin. Now, though, the panel has suggested that the government take steps to stop the use of digital currencies to protect people.

India is one country that is experiencing a soaring demand in bitcoin, which is seeing the country’s exchanges becoming overwhelmed with the increased popularity.

However, while the government continues to deliberate over the legality of bitcoin and its regulatory stance, the panel has suggested that the government launch a campaign to dissuade users from using the digital currency, reports the Financial Express .

An official said:

This does not have any legal sanctity. VC intermediaries have been advertising regularly … the government silence can be construed as permission for such activities.

The official added:

Using the coin for transactions are fraught with dangers of sudden value erosion.

These latest comments from India’s finance ministry comes at a time when the use of bitcoin trading is experiencing a surge in popularity.

In May, digital currency exchange Zebpay hit a notable milestone when it saw more than 500,000 installs of its app-only service on Android. As a result of user demand, the exchange was forced to impose ‘temporary’ buy limits on bitcoin purchases due to a shortage of bitcoin stocks.

Another factor brought on by the boom in digital currency trading can be linked to the country’s demonetization last October, which saw the government wiping out 86 percent of the nation’s currency overnight. Then the price of bitcoin was trading around Rs 40,000. Now, though, according to Zebpay, it’s valued at Rs 180,000.

Bitcoin continues to be a popular form of trading in India. If the government does implement campaigns designed to dissuade people from employing the currency, it remains to be seen whether the measure will have any impact on them.

In June, the finance minister Arun Jaitley held an inter-ministerial meeting to discuss the risks associated with the digital currency. According to the report, no decisions related to digital currencies were taken, despite seeing prominent figures including India’s IT minister and the financial services secretary at the meeting.

Featured image from Shutterstock.