Bitcoin and cryptocurrencies will not be legal tender in the country until fully regulated.
Indian Finance Minister Arun Jaitley has claimed that the government of India is yet to recognize Bitcoin as a legal tender in the country as of late November 2017. He did point out that the recommendations regarding the possible legalization of Bitcoin and other virtual currencies across India are being worked at by the government.
In an interview with the Economic Times, Jaitley said that he has already informed the Indian parliament that the country’s central bank, the Reserve Bank of India (RBI), has yet to issue any licenses to operate with digital currencies within its jurisdiction. He further claimed that the government is still assessing recommendations to regulate the virtual currencies.
“Recommendations are being worked at. The government’s position is clear, we don’t recognize this as legal currency as of now.”
Efforts to regulate cryptocurrencies in India
The Indian government has been working to regulate the use of virtual currencies in the country for the past few months.
In April 2017, the government established an interdisciplinary committee to assess the possible drafting of regulations covering digital currencies. The committee is composed of several government agencies including the RBI, the Department of Financial Services and the Ministry of Revenue.
In October 2017, however, the Indian Supreme Court issued a notice to the RBI and other related agencies asking them to provide an answer to the petition filed on the cryptocurrency regulation issue. The original petition expressed apprehensionabout the possible use of Bitcoin and other virtual currencies in untraceable cross-border transactions, making them as attractive tools for cybercriminals and tax evaders.
Part of the petition read:
“The lack of any concrete [control]mechanism pending the regulatory framework in said regard has left a lot of vacuum and which has resulted in total unaccountability and unregulated Bitcoin trading and transactions.”
Despite the increasing appetite for cryptocurrencies in the country, regulators have not yet decided how to regulate Bitcoin and other virtual currencies. Until then, Bitcoin will not be considered a legal tender in India. In a previous report, a chief economist predicts that Bitcoin will not become legal in India without the necessarily monitoring from the government.
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Author: Joshua Althauser