NEW DELHI: The cryptocurrency panel of the mobile and internet firms body IAMAI today said Finance Minister Arun Jaitley's "words" about virtual currency have been misinterpreted and misreported. It said that extrapolating the meaning of an asset not being 'legal tender' as 'illegal' is irresponsible.
"The Blockchain and Cryptocurrency Committee (BACC) of IAMAI is happy that the finance minister has recognised the importance and popularity of cryptocurrency and has chosen to talk about it on budget day. As far as the exact content of what he said, we are neutral-to-positive about it. However, we are pained to see his words being misinterpreted and misreported," the Internet & Mobile Association of India (IAMAI) said in a statement.
Finance Minister Arun Jaitley in his budget speech had said that cryptocurrencies are not legal tender and will take measures on their use as part of payment systems. "The government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payment system," Jaitley said.
The IAMAI panel said that during the question hour in Rajya Sabha on January 2, 2018, the finance minister had made the exact same point, where he stated that, 'bitcoins or such cryptocurrencies are not legal tender' and this has been the position taken by almost all governments around the world. "We regard this statement quite neutrally. It is our understanding that only currency notes and coins are legal tenders. That doesn't make any comment on the 'illegality' of other assets. It must be emphasised that gold, stocks, bonds, and other such assets are also not 'legal tender'.
To extrapolate that to mean that such assets are 'illegal' is irresponsible," the statement said. Among cryptocurrencies, Bitcoin has emerged as one of the most preferred digital currencies and is also accepted by many firms as payment for their product or services. The rate of Bitcoin has seen a high level of volatility. Last month, it was trading for over Rs 14 lakh a unit. The price has dropped significantly since then and is now trading below Rs 5 lakh a unit.
The IAMAI panel statement said that every citizen and business in this country should play their role in eliminating financing of illegitimate activities, regardless of whether such financing is done using legal tender, cryptocurrency, gold, or any other medium. The panel appreciated the stance of the government and said it wants to wholeheartedly support the government in a move to check use of cryptocurrency for illegitimate activities.
"Our members already maintain a no-compromise approach to KYC (know your customer) and AML (anti-money laundering) processes. We encourage the government to work with our members, as we are committed to detect, report, and eliminate suspicious transactions in pretty much the same way as other institutions do. This will also generate confidence in our banking partners," the statement said.
The IAMAI panel said that it will support government's position to eliminate the use of crypto-assets as part of the payment system. "When a platform as significant as the Union Budget speech mentions cryptocurrencies, it is clear that the sector is coming of age. We welcome this positive development, and see it as an important milestone in the journey to policy- clarity and consumer-education," the statement said.