Bitcoin drops 9 per cent to USD 9,400; Centre set to ban use of crypto assets

Bitcoin and other cryptocurrencies continue to fall substantially followed by India's no-holds-barred attack on virtual currencies on Thursday. Bitcoin dropped 9 per cent to USD 9,400, the lowest level since November after Finance Minister Arun Jaitley termed these crypto assets illegal.

"The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payment system," Jaitley said.

The comment comes during his annual budget speech on February 1.

According to coinmarketcap.com, a cryptocurrency market portal, the price was USD 10,247 at 12 pm and has started falling substantially after Jaitley's speech. At 6 pm it traded USD 9,381.

The government is also expected to explore the use of blockchain technology proactively in order to make a step forward towards a digital economy.

Moreover, Jaitley's announcement may trigger 'panic selling' in cryptocurrencies in India, according to Amit Maheshwari, a partner at tax consultants Ashok Maheshwary & Associates LLP.

Also Read: Oppositions slam Arun Jaitley's Union Budget 2018; Here is who said what!

Earlier, Bitcoin prices peaked at more than $19,600 but the government started its crackdown since last December. Arun Jaitley had also warned investors, connected with such Ponzi schemes.

Last month, Income Tax department had also sent notices to 10,000 people after a nationwide survey revealed transactions of more than $3.5 billion over a 17-month period.

"The choice to invest in Bitcoin and other cryptocurrencies will be open to end users, the government is taking proactive measures to curb fraud and illicit transactions," Kartik Shinde, a partner at consultancy EY India was quoted.