It has been a rough week for cryptocurrencies in India. Debjani Ghosh, head of the Indian National Association of Software and Services Companies (NASSCOM), has come out in support of government’s stance on cryptocurrency, barely a week after a man was arrested for running India’s first bitcoin ATM kiosk.
She stated that cryptocurrencies are illegal and everyone should obey the law. “It is the law of the land and hence, we have to work with it,” Ghosh urged crypto enthusiasts and investors in India.
Before she made the statement yesterday, the first Bitcoin ATM was launched in the country, courtesy of Unocoin co-creator Harish BV.
Although the local law enforcement officers confiscated the ATM, Harish argued that “the minister’s statement was clear: Cryptocurrencies are not legal tender in India. He did not say ‘illegal tender.’ There’s a huge difference. It means you bear the risk of your investment and there’s no regulation for the industry.”
While India has seen the majority of its population jumping on the cryptocurrency bandwagon, cryptocurrencies are yet to have clear legal definition in the country.
While the government and the country’s central bank have maintained an unfavorable stance for digital currencies, they have shown interest in the blockchain. B.P. Kanungo, deputy governor of RBI, said:
“We recognize that the blockchain technology or the distributed ledger technology that lies beneath the virtual currencies has potential benefits for financial inclusion and enhancing the efficiency of the financial system and we also believe that they should be exploited for the benefits of the economy.”
Even as, the Reserve Bank of India is mulling possibilities of having a rupee-backed cryptocurrency, it has instructed all banks in India to sever ties with businesses dealing with cryptos.
Some cryptocurrency dealers have challenged the RBI’s decision in court. They argue that pushing digital money out of the formal banking system would be counterproductive as it puts the currency out of sight of law enforcement agencies, thus making illegal transactions easier.