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Budget 2018- Indian FM signals to crackdown on use of cryptocurrency for Illicit activities

Feb 01, 2018 Posted /  31434 Views

Budget 2018- Indian FM signals to crackdown on use of cryptocurrency for Illicit activities

Arun Jaitley, Finance minister (FM) of India in its 2018 Budget speech announced that it would soon formulate regulations to crack down on the use of cryptocurrencies for illicit purposes such as money laundering and funding of terrorist activities. The Finance minister in its budget speech stressed that Bitcoin and other cryptocurrency are not a legal tender and clarified that government has time and again discouraged the use of virtual currencies.

"The government does not consider cryptocurrencies as legal tender or coin, and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities."

Nonetheless, for quite some time now since demonetization and launch of GST taxation system, the Indian government have been struggling to find momentum with the economic growth.  Apart from it, the government have been under the constant pressure to fight against black money hoarding and for the same purpose in its Budget speech the Indian, FM outlined measures to rejuvenate the country's weakening growth rate.

Nonetheless, Bitcoin prices as depicted by the Indian exchanges have remained higher from those that are prevailing in the global market. The premium rates have been largely due to India's capital control system, because of which many foreigners take advantage form the high valuation of Bitcoin and other cryptocurrencies.  A report from October last year says that US Drug Enforcement Administration tells that Bitcoin has been used increasingly for cross-border transactions and international transactions. The digital currency helps in evading the taxation laws and capital controls.

Since last year, India has witnessed a great surge in the Bitcoin trading and utilization in their everyday businesses, especially in case of large capitals. However, these digital assets have remained highly volatile with price movements swinging wildly on news flow and FUDs.

The cryptocurrency space is seeing a global clamp down on crypto trading, with countries such as South Korea banning anonymous trade in such currency and China leading the pack with a ban on mining of cryptocurrencies a swell. Recently, a Japanese exchange also witnessed one of the biggest heists of $500 mln recently.

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Tags: Use of cryptocurrency Finance minister Arun Jaitley

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