Legal Status of Cryptocurrency under New Budget

Finance Minister Arun Jaitely has very clearly laid down the stand of the Indian Government on Cryptocurrency and Blockchain in the Union Budget 2018. Contrary to what the news articles are claiming, in my opinion Cryptocurrency is not banned.

The Government has only maintained its earlier stand that “Cryptocurrency is not legal tender in India”, which is nothing new and was already declared earlier. This means Cryptocurrency is not recognised in India for commercial transactions like buying or selling goods and services.

In simple words, legal tender is any official medium of payment recognized by law which can be used to settle debts or financial obligations. Cryptocurrencies cannot be used for such purposes in India.

An individual holding Cryptocurrency can use it in countries where it is accepted. Also, exchanging one cryptocurrency for another is considered a barter transaction and not illegal. However, you cannot use Cryptocurrency to purchase goods in India.

The Government has stated it will crack down on illegal transactions involving Cryptocurrency. There is also a need for a proper regulatory framework or a clear legal stance.

The Government will also harness Blockchain Technology for the Digital India Movement, giving legitimacy to the technology.