Despite Reports, India's Bitcoin Policy Hasn’t Changed

Media sources in India reported that the government had been deemed illegal, causing a stir that ultimately proved to be overblown.

Mar 31, 2017 at 6:12 p.m. UTC
Updated Sep 11, 2021 at 1:12 p.m. UTC

Media sources in India reported this week that the government had deemed bitcoin illegal, causing a stir that appeared to be overblown.

Newspapers such as The Economic Times of India declared that, according to a statement from Minister of State for Finance Arjun Ram Meghwal, use of the digital currency was "illegal" and exposed users to potential violations of anti-money laundering rules.

Initially greeted as a shift in policy for India, which is home to a range of companies working on both bitcoin and blockchain-related projects, the statement has since come to be seen as merely a reiteration of an earlier position taken by officials in the country.

Indeed, the statement was nearly identical to one issued by the Reserve Bank of India in late 2013, which was largely a warning about price volatility and theft risks.

"The absence of information of counterparties in such peer-to-peer anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws," the central bank said at the time.

A published copy of the question posed to the Indian government bears out these similarities:

"The absence of counter parties in usage of [virtual currencies] including bitcoins, for illicit and illegal activities in anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws."

Regardless of its interpretation, the controversy sparked by the misconstrued statement has led to calls for the Indian government to clearly outline its position on the legality of bitcoin.

A petition created on Change.org has attracted just over 7,600 signatures. A second one, similar in scope, has drawn more than 1,110 supporters.

India map image via Shutterstock

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