New Delhi: On Thursday, Finance Minister Arun Jaitley announced in the annual budget that virtual currencies are no legal tender and that the proliferation of its use for illegitimate financing will be curbed.
"Crypto currencies are no legal tender and the government discourages its use. However, the government will look at the utilisation of Blockchain (a distributed digital technology that supports crypto currencies)," Jaitley said in his Budget speech in Parliament.
After the announcement, the bitcoin prices fell significantly on Thursday. The rising craze for bitcoin was something, the government was monitoring closely. Both the government and banks had been worried about the recent high number of Bitcoin transactions in the country.
The finance ministry has in the past called cryptocurrency a Ponzi scheme, and the RBI has cautioned Indians to not engage in the trading frenzy as it lacks legitimacy and is unsafe for investors.
In December last year, Income Tax (IT) department issued notices to 4 to 5 lakh high networth individuals (HNI) across the country who were trading on the exchanges of this unregulated virtual currency. Seems the party is now over, with the government finally putting its foot down.