Contrary to what some media outlets reported, India is not enforcing an imminent ban on Bitcoin, cryptocurrencies and trading. The news made global news coverage but many news outlets made wrong interpretations. They mislead their viewers about the situation and caused a panic on the Indian exchanges. Misleading comments and tweets warning of a ban flooded the press and social media.
India’s finance minister Arun Jaitley delivered the country’s budget in the Parliament for 2018-2019. This happened on February 1, and he touched on the subject of cryptocurrencies and their usage in the country.
“The Government does not consider cryptocurrencies as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system.” – stated Arun Jaitley
These regulatory comments on cryptocurrencies from the finance minister did not make any remarks on prohibiting cryptocurrencies and exchanges. Furthermore India’s tax authorities are using cryptocurrency exchanges to chase tax evaders.
What are the takeaways from this speech?
We can understand few things from his statement. Indian authorities will crackdown on illegal cryptocurrency activities and will discourage the public from using cryptocurrencies as payment methods. Also the Indian authorities do not recognize Bitcoin as legal matter.
Jaitley’s speech did not mention the legality of cryptocurrencies neither did he signal any sort of shut down on cryptocurrency exchanges. But many people understood his words the way they wanted and claimed that a ban was imminent.
Misreporting and fake news
The immediate aftermath of Jaitley’s speech caused a vicious misreporting from India’s national and mainstream media outlets. There were a lot of reporting about the Indian government prohibiting exchanges and cryptocurrencies.
Quartz India made one of the earliest mainstream reports with a giant headline from screaming “Arun Jaitley has just killed India’s cryptocurrency party”. The rest of the media outlets followed in a similar tone reporting that it is the end of the road for cryptocurrencies in India.
A major news anchor wrote on Twitter: “Bitcoin to be banned. Cryptocurrency illegal in India says Arun Jaitley”. Reuters India wrote a dramatic headline: “India vows to eliminate use of cryptocurrencies”. Fortune followed suit writing “Bitcoin price slides again as India announces ban plan” later changing the headline.
“We are discouraging people from using it now. There is a government committee that is looking into it right now and will announce their decisions and next steps after they are done” –Jaitley
The mentioned committee is the “Virtual Currency Committee” established by India’s Ministry of Finance in April 2017. They are a disciplinary committee with representatives from a number of ministries as well as those from the central bank of India. They are tasked to propose a regulatory framework for cryptocurrencies in India. One of the biggest exchanges in India stated in a tweet:
— Unocoin (@Unocoin) February 1, 2018
India in summary
India has been chaotic the past two years in attempting to regulate cryptocurrencies. Since the country’s currency reform the interest in Bitcoin has increased dramatically. Local exchanges have reported huge growths in user base and trading volume. However India’s central bank has warned repeatedly on cryptocurrency investments and has called the industry illegal.
For India it is business as usual. Some people see this as a positive step towards clear policy and regulations. We will have to wait and see what the committee will come up with. Earlier this year India froze the bank accounts of Indian exchanges. You can read more about it in this article.
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