Budget'18: Bitcoins not legal but Govt will explore blockchain

In a big blow for cryptocurrency, Finance minister Arun Jaitley in his Union Budget speech deemed Bitcoin and other cryptocurrencies illegal tender in India but said that the government will explore its underlying technology, i.e. blockchain.

“The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system,” Jaitley said. This declaration comes after months of speculation over the fate of cryptocurrencies in India, home to a large number of bitcoin traders and investors. In fact, one in every 10 bitcoin transactions in the world takes place in India.

However, Jaitley has announced that the government would adopt blockchain, the technology that supports cryptocurrencies. “The government will explore use of blockchain technology proactively for ushering in the digital economy,” Jaitley said.

"The Finance Minister’s vision to evaluate the use block chain technology while clarifying Govt. of India’s stand on cryptocurrency is a great example of not throwing the baby out with the bath water," said Arvind Chandrasekhar, WW Government Affairs Lead, AMD.

According to Sirish Kumar, Founder and CEO - Telr, "Blockchain will disrupt the present practices related to money transfer, contracts and property records , amongst other things. Blockchain should be explored to tackle bad loans by real time information exchange between banks. I believe blockchain will be pivotal on executing the smart cities  initiatives, particularly the small towns in India. This will include disrupting models of transportation like Uber, Ola etc.

Most commonly known as the technology underpinning the likes of bitcoin and Ether, blockchain is a digitised and decentralised public ledger of all cryptocurrency transactions. Stripping away the financial application, blockchain is essentially a bookkeeping platform that can be accessed by anybody on the internet but is owned by nobody.