“The government will take all possible steps to end the use of cryptocurrencies in the country’s payment system due to the possibilities to fund illegal activities through them”, said the Indian finance minister, Arun Jaitley. At the same time, however, he said the government will explore the usage of blockchain technology for its application to the economy for other purposes.
After the market capitalization of Bitcoin reached its peak in mid-December, as exchange rate approached 20,000 USD, a number of negative news against it and other digital money led to a series of crashes. The Bitcoin wiped out 44.2 billion USD of market capitalization in January, which now slid to less than 150 billion USD.
The tax authorities in India have begun investigations in December of various transactions made through trade of Bitcoin. This happened a little after the Indian Central Bank warned consumers of the potential risks of usage cryptocurrencies.
After the statement by the finance minister of India, the Bitcoin sank by 8.3% to 9,322.83 USD, but later the free fall continue and reached 8,700 USD.
The previous depreciation below 10,000 USD was about two weeks ago due to fears that regulators across the globe could impose stricter policies on virtual currencies. The sales were triggered by concerns about introducing more restrictive rules on key markets for cryptocurrencies – South Korea and China.