Media sources in India reported this week that the government had deemed bitcoin illegal, causing a stir that appeared to be overblown.
Newspapers such as The Economic Times of India declared that, according to a statement from Minister of State for Finance Arjun Ram Meghwal, use of the digital currency was “illegal” and exposed users to potential violations of anti-money laundering rules.
Indeed, the statement was nearly identical to one issued by the Reserve Bank of India in late 2013, which was largely a warning about price volatility and theft risks.
“The absence of information of counterparties in such peer-to-peer anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws,” the central bank said at the time.
A published copy of the question posed to the Indian government bears out these similarities:
“The absence of counter parties in usage of [virtual currencies] including bitcoins, for illicit and illegal activities in anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws.”
Regardless of its interpretation, the controversy sparked by the misconstrued statement has led to calls for the Indian government to clearly outline its position on the legality of bitcoin.
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