While Facebook has recently announced a ban on advertisings related to cryptocurrency, India is now next in line to put a ban on virtual currency.
The Indian government’s finance minister, Arun Jaitley, says that digital assets are not legal tender, nor are they part of the traditional finance system. Now, the only country to have designated Bitcoin as a legal tender is Japan.
This statement has now, unfortunately, been hijacked by journalists and has created a false atmosphere of fear, doubt and uncertainty, otherwise known as a FUD factor.
With this information, it is still rather surprising to see a common situation turn into a ban for all countries.
The War on Money Laundering and Terror
At a meeting on February 1st, Arun Jaitley made it clear that India’s ban on cryptocurrencies is directly related to the ongoing war against money laundering and other illegal activities.
Currently, even if it is not their only use, the Monero or ZCash (with their emphasis on anonymity) are actively used on the black market for illegal activities.
And, for the Indian government, Blockchain technology still does not have any designation as a legal tender, as Jaitley said: “The government does not recognize cryptocurrency as a legal tender and will take all necessary measures to eliminate the use of these cryptographic assets in the financing of illegitimate activities”. He followed this by saying, “The government will proactively explore the use of blockchain technology to support the development of the digital economy.”
Many Bitcoin critics, especially in the banking sector, believe that it is mainly used for illegal activities and should be banned at all cost. They also believe that any sort of regulations or initiatives set out to reduce the risk of illegal activity on the markets has been nothing but good news…
As unfortunate it is, in the eyes of most mainstream media, the cryptocurrency bubble is finally about to burst, and the markets are collapsing.
Two weeks ago, the founder of TenX, Julian Hosp, predicted a $6,000 drop in Bitcoin prices. At the time, this may have seemed crazy, but as of today, Hosp’s prediction has become reality.
Alas, there is some reassurance in all this mess. Hosp also predicted that after a slight decline in prices, that Bitcoin was going to soar as high as $50,000 in 2018. Hosp bases his opinion on the fact that cryptocurrencies are not just a bubble full of hot air and that the technology behind will revolutionize the global economy.
An Objective Vision of the Future
Ajeet Khurana, an Indian expert on cryptocurrency re-affirmed the finance minister’s statement and said that cryptocurrencies would not be banned in India, but they would not be part of the country’s financial institutions. Khurana explained: “The current payment system already includes many things such as the banking system. And, recently, digital portfolios and other payment mechanisms have been added to the system.”
So, for Khurana, what the finance minister meant to say was that cryptocurrencies are not going to be part of the country’s “payment system”. He also drew a correlation with gold saying, “Gold is not part of the system, but people are still trading assets such as gold. If both parties register the transaction, it is no more than a barter.”
This leaves many wondering whether they will be able to at least exchange one cryptocurrency for another. And, this will require a bit more of a clarification as to what the Finance Minister meant by “payment system”.
Recently, Bitcoin saw a decline in prices when South Korea’s Finance Minister made a slightly awkward statement that made the whole world believe the country was planning to ban cryptocurrencies.
After taking a 20% hit, Bitcoin seems to have levelled out at about $9,000. A price drop that still has many left dumbfounded, despite the Finance Minister’s attempts to retract his statement. Later, he explained, “The closure of exchange platforms in the country, referred to by the Minister of Justice, are only a proposal and they have yet to be discussed between ministries.”
So, it seems that South Korea is still going to bring some regulations to Bitcoin and other cryptocurrencies. However, there is not going to be a complete ban.
The allegations were nothing but a misinterpretation of the Indian Finance Minister’s words that spread like a wild fire, once again causing more ups and downs for Bitcoin, which is currently sitting at $8611.74, or 6882.12 Euro.