No, India is not banning bitcoin and cryptocurrency

Andrew Munro 5 February 2018 NEWS

shutterstock market crash 738x410

Any news, no matter how mild, can and will be used to predict the apocalypse.

OPINION: "The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system," said India's Finance Minister Arun Jaitley in a budget speech.

This sentence was creatively misinterpreted by news outlets with varying degrees of hysteria.

"India vows to eliminate [the] use of cryptocurrencies," Reuters reported, for example. "India will move to stamp out use of cryptocurrencies, which it considers illegal... launching a no-holds-barred attack on virtual currencies such as Bitcoin."

Reuters was also helpful enough to suggest that this news might trigger "panic selling."

At the same time, other news outlets were describing it as the death of "India's cryptocurrency party" and saying that "the government will do everything to discontinue the use of bitcoin and other virtual currencies in India."

Meanwhile, in the real world

In India, the country's exchanges were mostly wondering what everyone was screaming about. After all, the announcement was simply a reaffirmation of the government's previous stance on cryptocurrencies.

"For us, it’s business as usual," said Coinsecure CEO Mohit Kalra.

"This is in no way different from the various other statements given in the recent past. Nothing new has been determined," agreed Coinsecure chief operating officer Jincy Samuel.

"During question hour in Rajya Sabha on January 2, 2018, the Finance Minister had made the exact same point, where he stated that, 'Bitcoins or such cryptocurrencies are not legal tender.' This has been the position taken by almost all governments around the world, and we regard this statement quite neutrally," said Unocoin founder Sunny Ray to Cointelegraph. "It is our understanding that only currency notes and coins are legal tender. To extrapolate that to mean that such assets are "illegal" is silly at best, and grossly irresponsible at worst."

This fear, uncertainty and doubt come a few weeks after the suggestion that India's banks were trying to beat down the country's cryptocurrency exchanges. But then as now, the exchanges mostly had no idea what everyone was so excited about and said it was all just business as usual.



Welcome to the club

India is now in the same clique as China and South Korea. All of them are countries that have "banned cryptocurrency" at some point.

China is apparently in the middle of a crackdown that's been going on since 2013. And just recently, it brutally tightened the screws in a crypto mining crackdown... by cancelling erroneously applied electricity subsidies. And apparently there was another ambiguous crackdown of some kind in mid-January. Obviously all of these signified the final death of cryptocurrency.

Meanwhile, one of China's state telecommunications services has partnered with a crypto startup (Waltonchain) to test IoT technology, and plenty (IoT Chain) of other (NEO) cryptocurrencies are coming out of China.

Apparently no one told them that they were being cracked down on. Perhaps they don't read Reuters.


Meanwhile, someone in South Korea pointed out that cryptocurrency was quite speculative. Consequently, the markets went into a tailspin.

A couple of weeks later, someone in the South Korean justice ministry used the word "ban." Consequently, the markets went into a tailspin.

Shortly after that, a South Korean official clarified that banning cryptocurrency exchanges was unrealistic and simply wasn't going to happen. Consequently, the markets went into a tailspin.


What are the key takeaways?

  • India is not banning cryptocurrency and will not be banning cryptocurrency
  • China is not banning cryptocurrency and will not be banning cryptocurrency
  • South Korea is not banning cryptocurrency and will not be banning cryptocurrency
  • There's no news so mild you can't get hysterical about it
  • The word "crackdown" is on Merriam-Webster's word of the year shortlist for 2018

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