What a ridiculous question to ask?… any one would say. But this thought came to me after reading the comment supposedly made by a Finance Ministry Official (Unknown) quoted by coindesk.com in its article available here.
(If this quote is a result of what is published in Hindu, then all my remarks on Coindesk.com will apply also to Hindu)
The article states that a Finance Ministry Official has made a statement that Bitcon trading will be taxed. In the recent days the price has come down from $3000 to $2000. Hence there is a huge loss and some of it must have been suffered by those who acquired it in the last few months when the Indian Government started considering whether Bitcoin should be legalized or not. This article is therefore possibly is a “Pump and Dump” effort to jack up the price in India.
The exact quote is intriguing and states as under.
“Banning will give a clear message that all related activities are illegal and will disincentivize those interested in taking speculative risks, but it was pointed out it will impede tax collection on gains made in such activities and that regulating the currency instead would signal a boost to blockchain technology, encourage the development of a supervision ecosystem (that tracks legal activities and may also assist in tracking illegal activities) and promote a formal tax base.”
My first thought is that this is fake and no official will be naive to consider that “impeding tax collection” could be a reason not to ban Bitcoin. I have through a comment posted on the site asked for the name of the official and if I donot get the name, it would prima facie confirm that the article could be a fraudulent plant to influence the view of the finance ministry committee which is expected to come up with its report and suggestions.
I donot think that India under Mr Modi has gone that bankrupt as to consider Bitcoin as a source of revenue for the Government without which the progress would be impeded. If so, it would be even more profitable to formalize a tax base for drugs and arms as that would also boost the revenue collection and give an opportunity to track the sales. The only catch is that most such trades including Bitcoin happens through anonymous trades in foreign based exchanges and there is no way Indian authorities would be able to track it.
If Bitcoin is declared as a “Banned Substance” and a “Suspected Currency of Choice for Money Laundering and Terrorism”, by law, then any use of Bitcoin or trading of Bitcoin can be declared as “Assistance to Money Laundering” and “Assistance to Terrorism” and tracking could be possible by invoking international treaties.
I request coindesk.com to stop the posting of fake quotes as it would be defamatory to Mr Arun Jaitely and his subordinates. People who have tried to defame Arun Jaitely know what would be the consequence!.
I also request our Finance Minister or Finance Secretary to come out with a proper denial of this quote as otherwise, Mr Subramanya Swamy may start preparing another petition of his own on how to unravel whether this quote is true or fake and to whom it should be attributed.
The Supreme Court is already seized of the matter and even the Court may issue a notice to Coindesk.com to reveal the name of the official quoted in the report. If Coindesk.com removes the article, ( I will have a certified copy under Section 65B of IEA) then additional charge of “Tampering with Evidence” can be filed under Section 65 of ITA 2000/8.
There is only one option for the Government…To Ban (and announce it without any delay) Bitcoin and all Crypto Currencies unless the Reserve Bank of India floats one.
Even such a RBI sponsored Crypto Currency (BitRupee or whatever it may be called) would be acceptable only if every mining and every transaction is linked with an identity code and RBI can trace it to an individual whose KYC has been properly done. I will separately provide guidance if required on how the Government can boost its revenue in such a project.
For example, Only Digital Signature or E Sign certificate issued in India by a licensed Certifying Authority should be acceptable for authentication of transaction and wallet addresses). Even if mining is allowed to others it could be through a licensing system with the Miner paying a proper tax. Essentially, there should be no anonymity for the transaction.
Any other suggestion even if made would be a fraud on Indian economy and any suggestion that such a decision will in fact be made is a fraud to mislead innocent investors.