Cryptocurrency Craze Surges in India Despite Government Warnings

Cryptocurrency gained significant exposure in the mainstream in 2017. Its astronomical return rates have led people to invest significant capital in them, further increasing their value. Indians are of the largest investor groups in cryptocurrency, with no signs of stopping even as the Indian government and regulatory authorities release advisories warning their people to stay away from digital currencies.

In the Lok Sabha (India’s lower house of parliament) proceedings this week, India’s finance minister, Mr Arun Jaitley, clarified that cryptocurrencies are still not a form of legal tender in the country. Prior to this statement, the finance ministry had already issued a notification labelling cryptocurrencies as a “Ponzi Scheme”. Several other parliamentarians also expressed concern over the volumes of trade conducted at cryptocurrency exchanges, with a member, Ajay Mishra, even demanding a framework to be made in order to monitor Bitcoin flow in the country.

The country’s central bank, the Reserve Bank of India, has also issued multiple notifications aimed to dissuade the Indian public from conducting cryptocurrency transactions. NDTV reported that, the finance minister is claimed to be deliberating with his department about cryptocurrencies and discussing about specific actions needed to be taken on the same.

Earlier this month, it was reported that the country tax department had sent notice to wealthy bitcoin traders informing them that they would have to pay capital gains tax on their assets. The notices were followed by raids conducted by the department on major cryptocurrency exchanges in the country.

But, the government’s moves against digital currencies have failed to dampen the Indian populace’s attraction towards cryptocurrencies. People are doing all it takes to get registered on crypto exchanges, even after long waiting periods. Leading Indian crypto exchange Unocoin informs that the number of people registering on their platform has increased significantly to 10,000 per day compared to just 1,000 per day a month earlier.

Coinsecure, which is another major player in the country, has reported a spurt in the number of registrations on its platform. The company has already posted a notice on its site explaining the delay in KYC (Know Your Customer) procedures due to overwhelming demand.

It remains to be seen what regulations the Indian government would enforce on digital currencies in the upcoming future.

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