Finance Minster Arun Jaitley while presenting his last full budget for fiscal 2018-19, announced that the government will take steps to discontinue the use of cryptocurrencies in India and does not recognise these currencies as legal tender.

“The government does not recognise cryptocurrency as 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 payments system,” Jaitley said.

Also read : Why bitcoin should not be allowed

Reacting to the announcement, Rakesh Bhargava, Director, Taxmann said, “Finance Minister clarifies that Cryptocurrencies shall not be deemed as legal tender and strict actions might be taken against investors in Cryptocurrencies. However, he also mentioned that it can explore ways for using the blockchain technology for digital transactions. If it is not considered as legal tender, whether any transaction in it will be subject to GST or not is yet to be clarified.”

Monish Panda, Founder, Monish Panda & Associates said, “This clearly indicates that the Government will now either come out with a legislative mechanism or make suitable amendment in existing legislation to ensure that dealing and trading in crypto currency is made illegal and to penalise entities and individuals who are involved in trading and circulation of crypto currency. We will have to wait and watch as to what will be final framework of such legislation, if such legislation is introduced.

Praveenkumar Vijayakumar, Chairman & CEO Belfrics Global, a cryptocurrency exchange said that, “As expected, the government has not changed its stance on the trade of cryptocurrencies in India. However, it is definitely a progressive step by the FM to announce that the government will be looking at utilisation of blockchain as a technology. It shows that the government is looking at blockchain in a serious way, which is a positive sign. I believe that the government is taking it’s time to understand the crypto world and will come out with suitable steps to regulate the same in this year. India's global share on cryptocurrency market is steadily increasing and government intervention can only help regulate this entire industry