India has had an interesting journey with bitcoin and other cryptocurrencies in the last year or two. As one of the world’s most populous countries and most influential economies, India is in a position to drastically alter the future of cryptocurrency. We’ve seen, for instance, that when some Far East countries made it easier for people to trade in cryptocurrency, bitcoin prices surged. One article put it about as clearly as it could be said: Japan’s legalization of bitcoin led to a rapid surge in mainstream adoption (and by extension, increased demand and higher prices).
India could have a similar effect if the government or financial institutions were to offer a full-throated endorsement of cryptocurrency. As of now, however, it appears they’re doing just the opposite. The latest word comes from Finance Minister Arun Jaitley, who has said that bitcoin and other cryptocurrencies are not legal tender, and thus that trading in them is actually considered illegal. While Jaitley suggested that people trading cryptocurrencies are doing so “at their own risk,” his overall statement might not be as dramatic as pieces of it sound. Asked about the potential for regulation, Jaitley essentially said that the government is continuing to examine the matter and will form a more complete position in time.
Nevertheless, these are significant words from Jaitley, with potential to suppress the bitcoin market in India and perhaps impact global prices. India’s population is believed to account for just over 10 percent of cryptocurrency trading in the entire world, and if even a portion of that market is dissuaded, it could make for a significant blow to prices.
As to how Indian citizens with an interest in cryptocurrency should react to the statements from Jaitley, it’s difficult to say. Bitcoin regulation in general is a somewhat hazy concept, as there is no such thing as universal legislation surrounding cryptocurrencies. Reading about the subject you can basically learn that individuals must still comply with local financial law where bitcoin trading is concerned. Here, however, Jaitley has been somewhat unclear. While he made it clear that he doesn’t consider cryptocurrency to be legal tender, he did not expressly say that trading is a punishable offense – he merely made the vague remark about people doing it at their own risk.
If anything, this recent news appears to signal that a firmer Indian position on cryptocurrency could be on the horizon. It’s clear that the financial powers in the government are staunchly opposed to the continued spread of cryptocurrency. It is less clear, however, what if anything they plan to do about it.