Bitcoin, the crypto currency that hit the news for its promise of easy money, touched shocking highs and lows in a short span of past few months. Yet it spawned a worldwide craze among speculators as well as common investors.
Though there is still no consensus among governments and central bankers on the status of crypto currencies, Finance Minister Arun Jaitley clarified in his Budget speech that crypto currencies were illegal and the government would not recognise them.
However, there’s more to the issue than Jaitley’s clarification.
The government is making an elaborate policy to nip crypto currencies in the bud, that is before they are in a position to facilitate the black economy or harm gullible investors.
A group under the chairmanship of Subhash Chandra Garg, secretary, department of economic affairs is in the last stages of deliberation, and is expected to come out with the government’s approach on the entire spectrum of issues related to crypto currencies.
To begin with, the government does not consider crypto currencies as currencies but as crypto assets. “We don’t like the word currency. Nobody has the authority to issue currency or coins. So, these are misnomers, wrong expressions. We prepared to treat them as crypto assets. Once we recognise that these are assets and not allowed as currency or coins, then if it is used in making payments of illegal activities, is our next line of worry. We will do everything to see that the use of crypto assets into these kind of activities are eliminated. And then you go on to identify what else should be eliminated, regulated or controlled,” Garg said in an interview to MoneyControl.
He said people should not fall prey to crypto assets without understanding them, and it was the government’s duty to see to that.
There is a lot of uncertainty and lack of clarity on the legal status of Bitcoins and other cryptocurrencies in India. “Can they be used legally for paying for goods and services? Can these be considered as currencies at all? Or are these to be treated as a commodity? Are these an investment asset? Can these be treated as movable property? What is the origin of these currencies (or property or commodity)? Does it depend on the location of the servers or the computer mining it or the person(s) involved in mining it? Can they be considered to be held in India or abroad depending on the location of the wallet?” said Dr. Vikas V. Gupta, CEO & Chief Investment Strategist, OmniScience Capital.
After Jaitley’s Budget announcement on crypto currencies, what is certain is that the government will not let Bitcoin and other crypto currencies lure gullible investors or become a means of illegal deals.
Source: Bitcoin Isle
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