Contrary to the – now global – news coverage of Indian authorities enforcing an imminent ‘ban’ on bitcoin and other cryptocurrencies, India is, quite simply, not banning cryptocurrencies nor their trading on exchanges.
As CCN.com reported yesterday, India’s finance minister Arun Jaitley was delivering the country’s budget for 2018-19 when he touched on the subject of cryptocurrencies and their usage in the country.
To quote, Jaitley stated:
“The Government does not consider cryptocurrencies as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system.”
The takeaways from the statement are:
- Indian authorities do not recognize bitcoin as legal tender.
- Indian authorities will crack down on cryptocurrency usage in illegitimate activities and;
- Indian authorities will dissuade the public from using cryptocurrencies as payment instruments.
Jaitley did not make any pointed remark on a ban of cryptocurrencies, nor signal a clampdown on cryptocurrency exchanges. A side note – India’s tax authorities are, in fact, using the help of cryptocurrency exchanges to chase tax evaders.
However, the immediate aftermath of Jaitley’s remark sparked a torrent of erroneous reporting from India’s national press and mainstream media outlets about the Indian government outlawing and banning cryptocurrencies.
“Arun Jaitley has just killed India’s cryptocurrency party,” screamed a headline from Quartz India, one of the earliest mainstream publications to report on the finance minister’s statement. ‘It appears to be the end of the road for cryptocurrencies in India’, read the introduction to the article with the rest following in a similar tone.
A prominent news anchor for a major TV news channel watched by tens of millions of viewers wrote: “Bitcoin to be banned. Cryptocurrency illegal in India says Arun Jaitley” on her Twitter account of over a million followers.
“India vows to eliminate use of cryptocurrencies,” read a dramatic headline from Reuters India, pointing to a “no-holds-barred attack on virtual currencies such as bitcoin” by Indian authorities.
Global mainstream reports ran with the same narrative. “Bitcoin Price Slides Again As India Announces Ban Plan” read a headline from Fortune. That has since been amended to “India Just Caused the Price of Bitcoin to Slide Again.”
No Ban. Repeat: No Ban!
As CCN.com stressed yesterday, none of the above rings true. To be precise, Jaitley spoke of a crackdown on the abuse of cryptocurrencies in illegal activities as well as their use as a method of payment.
Indeed, in an interview with Indian state-owned broadcaster Doordarshan following his national budget delivery, Jaitley was explicitly asked if the government was moving to ban cryptocurrencies.
A direct translation of the exchange reads:
TV Host: We’ve seen a lot of excitement over bitcoins. Why aren’t you banning it instead of stating it isn’t legal tender?
Jaitley: We are discouraging people from using it now. There is a government committee that’s looking into it right now and they will announce their decisions and next steps after they are done.
Still, no ban. The reference to the government committee is the long-established “Virtual Currency Committee’, an inter-disciplinary committee comprising of representatives from a number of ministries as well as those from the central bank and India’s biggest bank (also state-owned) tasked toward proposing a regulatory framework for cryptocurrencies in India. The committee was established by India’s Ministry of Finance in April 2017. To date, no findings have been made public yet.
What’s the Fuss About?
For India’s bitcoin industry, it’s business as usual. Sathvik Vishwanath, chief executive Unocoin, one of India’s largest -and best-funded – bitcoin exchanges told CCN.com:
“We did not see any change in the stance of the government. We are pleased the authorities are taking action against illicit usage of cryptocurrencies but, otherwise, there is no reason for any panic. It’s business as usual at Unocoin.”
Zebpay, another leading Indian cryptocurrency exchange, added:
Wrong interpretation: Bitcoin is illegal.
Correct interpretation: Bitcoin cannot be used as legal tender. Bitcoin cannot be used for illegitimate activities.
— ZebPay (@zebpay) February 1, 2018
On the contrary, India’s bitcoin industry is buoyed by the finance minister’s remarks on cryptocurrencies during a national address in delivering the nations’ budget.
“When a platform as significant as the Union Budget speech mentions cryptocurrencies, it is clear that the sector is coming of age,” read a statement from the Blockchain and Cryptocurrency Committee of India. “We welcome this positive development, and see it as an important milestone in the journey to policy-clarity and consumer-education.”
Meanwhile, India’s mainstream media has previously jumped the gun with false reporting on cryptocurrencies and their legality in the country. In March 2017, a number of major Indian media sources incorrectly reported bitcoin has been classified “illegal” by the Indian government.
In summary, do not be misled. India isn’t banning cryptocurrencies, nor their trading in the country.
Featured image from Shutterstock.