Business Today
Loading...

Turkey bans Bitcoin and other crypto coins for payments, will India follow?

Turkey's central bank has banned the use of cryptocurrencies including Bitcoin to purchase goods and services. Can we expect something similar in India in future?

twitter-logoIndia Today Tech | April 16, 2021 | Updated 16:17 IST
Bitcoin
The Turkish central bank has stated that using cryptocurrencies may cause non-recoverable losses.

Highlights

  • Turkey bans cryptocurrency for payments.
  • Turkey cites transactional risks behind decision.
  • No company accepting crypto payments in India.

Turkey's central bank has banned the use of cryptocurrencies and crypto assets including Bitcoin to purchase goods and services, citing possible "irreparable" damage and significant transaction risks. The bank published a legislation in the Official Gazette on Friday, saying that cryptocurrencies and other such digital assets based on distributed ledger technology could not be used, directly or indirectly, as an instrument of payment.

In a statement, the central bank said crypto assets were "neither subject to any regulation and supervision mechanisms nor a central regulatory authority," among other security risks.

"Payment service providers will not be able to develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance," and will not provide any services, it said.

The Turkish central bank has stated that using cryptocurrencies may cause non-recoverable losses for the parties to the transactions. It added that these losses may include elements that may undermine the confidence in methods and instruments used currently in payments.

What is India's stance?

Turkey's decision comes after Royal Motors, which distributes Rolls-Royce and Lotus cars in the country became the first to announce that it would accept payments in cryptocurrencies. Globally, giants such as Apple, Amazon and Expedia also accept such payments. In India, no company has officially announced that it will accept cryptocurrencies as payment.

However, reports in the past have suggested that many international crypto companies are hiring engineers and back-end developers in India and paying them in cryptocurrencies to accelerate to boost the adoption and bypass the local laws. Since the country doesn't have a legal framework against crypto, these transactions are neither legal nor illegal.

The Indian government has been critical of cryptocurrencies including Bitcoin. Earlier this year it had proposed a bill which led to speculations of a blanket ban on all digital currencies, apart from those sanctioned by the Reserve Bank of India. There has been a constant resistance from investors and industry players which has delayed a final decision on the matter.

But, the government made its first big move last month, making it mandatory for all companies in the country to disclose their dealings in virtual currency in their balance sheets. This was one of the first major steps to bring more transparency between investors and government. The companies will have to disclose profit or loss on transactions involving cryptocurrency or virtual currency and the amount of holding. They will also have to share details of deposits or advances from any person for the purpose of trading or investing in cryptocurrency or virtual currency.

Over 7 million investors are believed to have put more than $1 billion in cryptocurrencies in India. It is highly unlikely that the Indian government will follow the Turkish bank and impose a similar ban but don't be surprised if more guidelines are issued from investors and traders.

  • Print
  • COMMENT
BT-Story-Page-B.gif
A    A   A
close