India is turning against bitcoin as it does not consider cryptocurrencies to be legal tender. Amid efforts to stamp out payments strained by digital coins, the government reveals its all-out support for the blockchain technology.
"The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system," said finance minister Arun Jaitley in New Delhi on Thursday. "The government will explore the use of blockchain technology proactively for ushering in digital economy."
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India's income tax officials had begun looking into transactions at different illegal bitcoin exchanges in December 2017, soon after its central bank warned users about inherent risks. The federal government has also created a panel to deliberate on India's position on cryptocurrencies, reports Bloomberg.
"After today's announcement, people are getting scared. We have seen some dumping of bitcoins," says Anshul Vashist, the support manager at the cryptocurrency exchange Coinsecure, adding that it has a volume of about 100 coins per day.
India is not the sole state to be critical about virtual currencies. A severe crackdown has been underway in countries like China and South Korea. The Monetary Authority of Singapore has also been giving caution, reminding investors from the country of "losing all their capital".
