With the government outlawing crypto-currencies, in Indian bitcoins markets, the prices fell to Rs 6.22 lakh as compared to the earlier high Rs 11 lakh.
In a major blow at Bitcoins investors, Finance Minister Arun Jaitley has on Thursday stated that any form of crypto-currencies have been outlawed in the country – an action already taken by countries like South Korea and China.
And with the exchanges trading on crypto-currencies now facing immediate closure, FM Jaitley said, “The government does not consider crypto-currencies as 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.”
Many banks across the country have already prevented transactions by those associated with Bitcoins or other crypto-currencies – while other banks would now be forced to do so.
Monish Panda, the founder of law firm Monish Panda & Associates said, “Government will now either come out with a legislative mechanism or make a suitable amendment in existing legislation to ensure that dealing and trading in crypto-currency is made illegal and will penalise entities and individuals who are involved in trading and circulation of crypto-currency.”
While the central government and the Reserve Bank of India (RBI) had earlier warned against the use of Bitcoins, the central bank had recently issued fresh warnings to users of virtual currencies, alerting them of the possible economic risks associated with them.
Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP, a chartered accountant firm said, “There could be panic-selling, which could lead to losses. Traders won’t be able to set off their losses against profits from other assets since it has been declared an illegitimate trade.”
However, traders and companies dealing with crypto-currencies, including Bitcoins, claim the virtual currency to be legal.
Nischint Sanghavi, head of exchange, Zebpay said, “The finance minister, in his Budget speech, has reiterated the stance by the RBI that crypto-currency is not recognised as legal tender in India; it is being misreported that Bitcoin is illegal. This is not true. We continue to work hard to grow this industry responsibly.”
And with the latest announcement of the Finance Minister Arun Jaitley , banning virtual currencies in the country, the Bitcoins prices fell 9% to trade at $9,338 on Coinmarketcap, pulling the market capitalization to $156 billion. A day before the government outlawed crypto-currencies, the bitcoin’s market cap on January 30 was over $190 billion when the bitcoin prices were $11,300. In Indian bitcoins markets the prices fell to Rs. 6.22 lakh, while in earlier occasions the prices had hit a high Rs 11 lakh.