Cryptocurrencies not illegal, but are of little use: Experts

SUNIL PRADHAN
Sunday, 4 February 2018

However, the experts also said that as per the speech, cryptocurrencies will not be accepted as legal tender in the country and no payments will be accepted with cryptocurrencies

Pune: Industry experts pointed out that Finance Minister Arun Jaitley’s Union Budget speech on cryptoassets does not make Bitcoin, a cryptocurrency, illegal and people can still continue to possess Bitcoins.

However, the experts also said that as per the speech, cryptocurrencies will not be accepted as legal tender in the country and no payments will be accepted with cryptocurrencies.

“The Centre does not consider cryptocurrencies legal tender and will take measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system,” Jaitley said in his speech.

Charted Accountant Rishabh Parakh said that as per the speech, cryptocurrencies cannot be used for payments in India. “That does not mean cryptocurrencies are illegal. It is not that the government will arrest people holding cryptocurrencies. The only thing is people cannot use these currencies for transactions. Similarly, the finance minister mentioned that use of these cryptoassets in financing illegitimate activities will not be allowed. We are aware that such assets can be used in hawala and so such illegal activities should be prevented. As payment from such currencies is not allowed, people can only use it as investment, but then they need to declare the income earned from such assets,” added Parakh.

Cyber expert Pankajj Ghode, Founder and Chairman of Global Blockchain Foundation, said that the government is still working to make laws on the technology.

“As of now Bitcoin and cryptocurrencies are neither legal nor illegal. The finance minister clearly said that payment using cryptocurrencies will not be allowed and so these cryptocurrencies are of no use to people,” added Ghode.

Speaking on use of cryptocurrencies by the government in the future, Ghode said such a situation is not a possible scenario.

“There cannot be multiple legal tenders. In India, we have only Rupee as legal tender of payment and the government will not go in for making cryptocurrencies legal tender,” added Ghode.

Speaking about taxation on income earned through Bitcoin investments, Ghode said that the Income Tax Department has sent notices to several persons dealing in Bitcoin. “However, I am yet to hear of people paying tax on Bitcoin investments,” added Ghode.

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