Cryptocurrency, the new digital asset phenomenon, is still struggling to get accepted by the Indian authorities. This is partly due to an incomplete understanding of the concept. Multiple warnings have been issued against its use; many officials even declaring that it is illegal. But currently, the fact is that cryptos, like bitcoin, are neither banned nor regulated, in India.
Despite all the pressure, the Indian crypto sector is continuing to grow. Also, according to a few studies, the new crypto-related jobs have grown by 300 percent in the country, in a period of six months last year.
However, Mr Shaktikanta Das, a financial expert, has spoken against the use of cryptocurrencies. According to a report by news.bitcoin.com, Mr Das told Quartz that India’s fiat currency, the rupee, is guaranteed by the Reserve Bank, while cryptos are created “out of thin air”. The fact that only the RBI is allowed to issue currency also makes transacting in cryptocurrencies illegal in India.
Pointing out they have no asset base, Mr Das also argued there was no legal provision backing up crypto transactions and referred to cryptocurrency as a “serious threat to the financial stability” for the country and world.
Presenting Budget 2018 last month, Mr Arun Jaitley, Minister of Finance and Corporate Affairs, said that cryptocurrency is not recognized as a legal tender in India. He said, “The Government, in Delhi, will take all measures to eliminate its use in financing illegitimate activities. In the meantime, commercial banks have taken measures to curb crypto-related transactions, and cryptocurrency exchanges have been targeted by financial authorities.”
Also reported that in February India’s Income Tax Department issued notices to at least 100,000 cryptocurrency investors.