India bans cryptocurrencies, but will further explore blockchain

The Indian government doesn”t recognize bitcoin as legal tender and is fully committed to eliminating cryptocurrency payments from its system, Bloomberg writes. Government officials have repeatedly called cryptocurrency payments mere “Ponzi schemes” and sent out thousands of tax notices to cryptocurrency investors.

Despite banning the purchase and sale of cryptocurrency, the Indian government wants to further explore blockchain technology (on which bitcoin is based).

“The government does not consider cryptocurrencies 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,” Finance Minister Arun Jaitley told lawmakers in New Delhi on Thursday. “The government will explore use of blockchain technology proactively for ushering in digital economy.”

India is not the only country taking measures affecting cryptocurrencies; South Korea and China also announced recently they would regulate cryptocurrencies.

Generally, countries have different policies regarding cryptocurrencies and are looking into either banning them or legalizing cryptocurrency payments by enforcing the same taxes and reporting obligations as for traditional currency.

Social media giant Facebook announced this week that it will ban ads promoting “financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings and cryptocurrency.”

Following Jaitley”s announcement that India will ban cryptocurrencies, bitcoin, ripple and ethereum prices dropped dramatically.