Business

Policy

India signals ban on cryptocurrencies, embraces blockchain

Doubles spending on digitisation efforts – and tariffs on electronics

By Simon Sharwood

24 SHARE

Updated India has vowed to ban the use of cryptocurrencies within its borders, it appears.

News of the clampdown was delivered by finance minister Arun Jaitley in his annual budget speech (PDF) delivered on Thursday.

“The government does not consider crypto-currencies 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,” Jaitley said at paragraph 112 of the speech.

So, er, is that a crackdown on cryptoassets used for illegal purposes, or a crackdown on cryptoassets used for illegal purposes and legal payment systems? And what about not considering it legal tender?

The ambiguous statement has been widely interpreted as an upcoming blanket ban on digital cash, although crypto-coin investors and exchanges are holding on dear to the interpretation that India will only be going after cryptoassets used in unlawful activities.

In his speech, Jaitley added “the government will explore use of block chain technology proactively for ushering in digital economy.” The minister also announced more money for the digital economy: it’ll get double the funding this year at 3,073 crore (about US$500m).

All three positions are consistent with government policy.

India to launch moon mission in March 2018

READ MORE

In recent years India has made two big reforms. 2016’s effort was “demonetisastion” and saw large banknotes invalidated. In 2017 India introduced a single sales tax covering the nation, replacing state-based sales taxes that saw charges levied at borders between states. Both were efforts to crimp the cash economy and broadening India’s tax base.

Refusing to allow cryptocurrency transactions will probably achieve the same goals, given the anonymity such instruments afford.

India is also digitising government services at speed. Jaitey also noted the utility of blockchain, as have a great many others, so the fact India hopes to put it to work is anodyne.

Another budget measure that won’t surprise India-watchers is a proposal to increase customs duty on mobile phones and smart watches from 15 per cent to 20 per cent, and to double tariffs on some electronic components. Jaitey pitched those hikes as job creation measures, a clear reference to the “Make In India” that encourages global companies to bring some of their manufacturing efforts to the nation. ®

Sign up to our NewsletterGet IT in your inbox daily

24 Comments

More from The Register

No, Sierra Leone did not just run the world's first 'blockchain election'

Blockchain voting outfit ran its own count, but only as an observer

Capita seeks new networking chief: Up for it?

Outgoing head congratulated for role in division's transformation

Barnet Council reckons Capita's dropped the ball on outsourced services

Recommends bringing finance and HR in-house next year

Lucky, lucky, Westminster residents: Who better to look after your housing benefits than Capita?

Ooh... and council tax too! Again! UK capital borough is truly spoiled

Capita: We are seeking staff to join our board. Just two please

Imagine the kind of luxury custard creams you'd get at that meeting, right proles?

Spending watchdog points finger at Capita for 1,300 shortfall in British Army rookies

No one knows if recruitment system will be usable once contract ends in 2022

Guess who's still in charge of your gas safety, Brits? Capita

Out of the frying pan into the... frying pan

India makes biometrics mandatory for all e-gov projects

Cloud's just 'recommended', for now, as local industry plans 50 per cent growth by 2025

Capita onshores IBM transformer man as chief growth officer

New hire has work cut out. Say it with us: Ggnagh... gna- digital transformation

UK defence secretary ponders £50m hit to terminate Capita recruiting contract

Army short of 5,000 grunts, MPs warned