India Wants to Discontinue Cryptocurrency Circulation

February 1, 2018

The use of bitcoin and other cryptocurrencies in India may be limited or even discontinued, said country's Finance Minister Arun Jaitley in his budget speech. He also added that India still does not recognize cryptocurrencies as legal tender, however the country will promote the use of blockchain technology in local payment systems. 

Jaitley said:

"The government does not recognise cryptocurrency 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."

This statement could seriously affect the whole cryptocurrency market, as India is one of the largest parts of it. Actually, every tenth bitcoin transaction takes place in the country. 

Over the past few month, the government and the central bank of India several times expressed their concerns about bitcoin and other cryptocurrencies. In addition, at the end of 2017 Ministry of Finance of India stated that cryptocurrencies "are like Ponzi" and warned the people about the risks related to them. 

Jaitley's statement once again displays that Indian government is extremely skeptical about cryptocurrencies, which may lead to the tighter regulating measures aimed at limiting the spread of digital currencies. At the same time, other large Asian crypto market such as China and South Korea have already taken regulating measures and it is possible that the cryptocurrency regulation in these countries may become much tighter.

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