When the Finance Minister Arun Jaitley announced, in his budget speech, that the Indian government is clear in its policy that the cryptocurrencies are illegal tender there were quite a few ruffled feathers. Many Indians had invested in Bitcoins and some of the other digital currencies hoping that the government would one day regularize the currencies. Well they may have to wait longer.
However, the government lost no time in announcing that it is going ahead and appointing a regulator to oversee the trading of ‘crypto assets’. The trading is currently being carried on through cryptocurrency “exchanges” which are coming under any regulatory body.
In the Indian context, as it could be in many other countries as well, there are unscrupulous elements which exploit the gullible investors and then after something untoward occurs, the government agencies have to step in and clear up the mess. Possibly, the government wants to pre-empt any such eventuality and institute a regulator upfront.
According to a news report, the government has set up a committee to the different issues related to cryptocurrencies and submit a report to the government before the end of the current financial year, March 31. While the trading and transactions may be monitored, any payments being made using any of the cryptocurrencies will be treated as illegal.
In the perspective of the Finance Ministry, investments being made in cryptocurrencies is like the infamous “Ponzi” schemes which are already under serious investigations by the CBI. One report suggests that there are 200,000 new investors in the country taking to investing in cryptocurrencies each month. On their part, the trading community and those running the cryptocurrency exchanges have welcomed the move of the government to appoint the regulator and have promised to cooperate with the authorities.