1. IS BITCOIN
ILLEGAL IN INDIA?

2. • Some Media outlets recently said Indian Government has declared
Bitcoin and other virtual currencies illegal.
• Apparently, papers said Minister of State in Ministry of Finance,Shri
Arjun Ram Meghwal in his written reply to questions posed to him
declared Bitcoin illegal.

3. • Before we jump to conclusion, lets look at the questions.
• The questions were posed by Dr.K.V.P Ramachandra Rao.

4. • The questions were,-
• Whether Govt. shares the reported comment of RBI that Virtual
currencies pose a financial risk?
• If so, how will it address the problem while pushing for a cashless
economy?

5. • The essence of reply given by Minster of State in the Ministry of
Finance follows
• RBI or Indian Govt. has not given any authorisation or license to
deal with Bitcoins.
• RBI has already cautioned that Bitcoin traders may be exposed to
various risks.
• Creation, trading and other related activities are carried out without
authorisation from RBI and no regulatory approval has been
obtained.
• illicit and illegal activities could subject the users to breaches of
AML/CFT laws.

6. • From the reply it is clear that no where Govt has banned trading or
investing in Bitcoins.
• Govt. has cautioned that without RBI approval trading in Bitcoin is a
risky activity which is undertaken by users at their own peril.
• Illegal activities using bitcoin can be…..well may attract
punishment.

7. • It is unclear how newspapers got the idea that bitcoin has been
declared illegal?
• The reply is not different from guidance already issued by RBI.
• Illegal activities using fiat money is also punishable.Why single out
virtual currencies.
• Until there is an express ban prohibiting dealing in bitcoins, we
can’t say Govt. has declared bitcoin illegal.

8. • As far as my understanding goes Bitcoin users can trade in Bitcoin
at their own risk.
• Do NOT try to launder money using bitcoin.
• Government should come up with definitive guidelines.
• Newspapers should stop scaring people.

9. • The original reply is available at Rajya Sabha website.
• The press briefing related to an earlier reply given by Indian
government is also available at http://pib.nic.in

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