During the announcement of the Union Budget 2018, Finance Minister Arun Jaitley declared that cryptocurrencies cannot be considered as legal tender or coins. While some exchange platforms were happy that the instrument was recognized on the budget day, some misinterpreted it as being deemed illegal entirely. But here’s what his declaration really meant.
Jaitley said, “The Government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.”
This has been the position taken by almost all Governments around the world. For any government, only currency notes and coins are legal tender. That doesn’t make any comment on the ‘illegality’ of other assets. It must be emphasized that gold, stocks, bonds, and other such assets are also not ‘legal tender’.
Ajeet Khurana, Head, Blockchain and Cryptocurrency Committee (BACC) of IAMAI says, “Every citizen and business in this country should play their role in eliminating financing of illegitimate activities, regardless of whether such financing is done using legal tender, cryptocurrency, gold, or any other medium. We welcome this move by the Government, and want to wholeheartedly support the Government in this move.”
He further added saying, “Our members already maintain a no-compromise approach to KYC (know your customer) and AML (anti money laundering) processes. We encourage the Government to work with our members, as we are committed to detect, report, and eliminate suspicious transactions in pretty much the same way as other institutions do. This will also generate confidence in our banking partners.”
Simultaneously, Malav Virani of the law firm MDP and partners said focuses on the future of cryptocurrencies now that it has been recognized country-wise. He says, “The necessary next step is for government to legislate and thereafter regulate cryptocurrencies in the country. Clarifications are needed in respect of taxability, KYC norms, transferability, ownership, acquisition of cryptocurrencies here.”