The Centre will crack down on the use of cryptocurrencies in India, Finance Minister Arun Jaitley said during his Budget speech in Parliament on Thursday. The virtual currencies are being used to sponsor illegal transactions, he said.
Cryptocurrency exchanges allow customers to trade digital currencies for other assets or different digital currencies. They are largely unregulated currently.
“The government will take all steps to eliminate the use of cryptocurrencies which are being used to fund illegitimate transactions,” Jaitley said. The finance minister said the Centre will, however, consider blockchain technology, which supports virtual currency bitcoin and other cryptocurrencies
The finance minister’s announcement follows the Income Tax Department’s issuance of thousands of notices to Indians dealing in cryptocurrency. A nationwide survey by the department showed that more than $3.5 billion (Rs 2,235 crore) worth of transactions were conducted over a 17-month period.
The Indian government and the Reserve Bank of India had earlier warned users against using virtual currencies. The government even compared them to ponzi schemes and warned traders of the risks, including “permanent loss of money”.