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Indian Finance Minister, while presenting the Annual Union Budget declared the Bitcoin and crypto currencies as illegal tender. Also affirmed that Government of India does not support this type of transaction.
This spread a scare all around and consequently all cryptocurrencies world over slide down. Bitcoin fell by as much as 6%.
But one has to analyze the statement of Finance Minister as to what he said and what he meant in his budget speech and thereafter while replying to questions raised in the Parliament by various members of Parliament. Then only a clear picture would emerge. Let me analyze step by step.
A. He said it is not a legal tender and Government does not support.: This is absolutely true before and after . Bitcoin and crypto currencies are not issued by Governments who makes the law meaning they are not legal anywhere in the world. If it is not legal no Government can support it. (It is not supported meaning it is being tolerated all over the world)
B. He also said since 2013 to 2017 they have been warning people about the risks and perils of the system of crypto currencies. Well it is true and anyone investing in crypto knows ir well that all the risks are his and his only and he can not turn to anyone in case of any fraud or scam. Nothing changes.
C. He said there was danger of use of crypto in illegal purposes. Well this is also true even if Fiat currencies are used for illegal purposes it is a matter of concern to the Governments. What is new if a Government is concerned about use of crypto in illegal purposes. It is a matter of alarm throughout the world.
D. He recognized that there are more then 700 crypto currencies in circulation and also that there are as much as 11 exchanges working in India for sale and purchase of crypto currencies. He NEVER SAID HE WILL CLOSE THEM IMMEDIATELY OR IN NEAR FUTURE. So why scare?
E, He informed that there is already a high level Committee , under the leadership of Secretary, Economic Affairs to study the whole issue whose report is awaited. This means there is not rejection yet. He even spoke in his Budget speech that Government of India realises the importance of Blockchain technology and the same would be used by Government itself. Meaning the Government has already realised the value of the new technology. If the value of a technology is realized then definitly its value can and would be unlocked in one form or other. That is wht the crypto currency is.
F He further stated that they are studying the issue and would also consider the experiences of the other countries of the world before taking any decision as the India can not stand alone in the technological world. He also informed that MEASURES WOULD BE TAKEN AFTER CONSIDERING ALL. Measures!! here is the crux.
He said measures would be taken DID NOT MENTION THE WORD BAN. This is a welcome thing. If regulations are made rules are enforced to regulate the crypto currency so that is it not used for illegal or unwanted purposes then a common person, who is law abiding also, would be more then happy as he would be able to invest and go ahead in this field without fear.
Finally the cause of concern in India is because a huge % of total Bitcoin trade in the world is coming from India and it is feared that people are using their black money to shore it up. However if the regulations are in place and proper KYC is done for the investors the cause of concern would alleviate.
In my opinion this is a transitional time and would pass. The Government if doing its assessment fast and soon there would be some clear directions. It is a huge momentum and ignoring it would be impossible for anyone in the world.
Be happy and hopeful.
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