BITCOIN, THE SITUATION OF CRYPTOCURRENCY IN INDIA.

Bitcoin; These days with the massive influx of information surrounding us from all corners, we the people of India have become more aware of financial investments. A larger group of young professionals have shifted their interests in various domains of financial investment- the stock market, cryptocurrency, foreign exchange (Forex), and more.

In this article, we’ll keep our emphasis on cryptocurrency and its legality in India. So far there’s no concrete regulatory body to guide various cryptocurrencies in India. This leads to a feeling of fear among people who are investing in this exchange market. Obviously, it’s a market that is based on demand-supply forces. The prices of cryptocurrency coins vary the hype in the market. Since there’s no physical entity or industry with such associated coins, it gets really difficult to predict their future state.

Before we discuss more on its legality in India, let’s understand a few basics of Bitcoin.

What is Bitcoin (BTC)?

Bitcoin is a type of digital currency that is now generally referred to as cryptocurrency. It is traded all around the world. It is the first decentralized cryptocurrency with no centralized system to regulate it. Satoshi Nakamoto, who prefers to remain anonymous, is Bitcoin’s creator. Bitcoin is based on the blockchain network, a rapidly evolving technology. Miners protect the blockchain network by logging every set of transactions.

Can we trade in India?

Yes, Bitcoin can be bought and sold in India, but it cannot be imposed on anybody to use it as a payment method. The legitimacy of Bitcoin trading in India has yet to be determined. Bitcoin trading has not yet been deemed illegal (but this does not imply that Bitcoin is a legal tender in India).

Where to buy or sell Bitcoin in India?

In India, Bitcoin and other cryptocurrencies are traded on exchanges such as Koinex, Pocketbits, Zebpay, Unocoin, and others. There is no regulatory authority over these internet exchanges. As a result, the RBI has issued a security warning to the audience, emphasizing that people trade at their own peril.

Cryptocurrencies: Are They Banned?

RBI indicated in a press release that it has not granted a license to any virtual currency operator and that anyone dealing in the currency does so at their own risk. However, there is no mention of Bitcoin trading being unlawful in the news release. 

The Reserve Bank of India (RBI) is India’s highest banking body, in charge of the country’s monetary policies. As a result, when the RBI says it hasn’t provided any authorizations, it’s implying that virtual currencies aren’t considered legal money. 

Bitcoins and other cryptocurrencies cannot be legally held as an investment or asset, according to the RBI. In India, Bitcoin is not yet prohibited.

The RBI is simply advising investors about the security risks associated with virtual currency. If the person continues to deal in digital currencies, he or she will be solely accountable for any losses incurred as a result of such trading. 

Many countries throughout the world have begun to accept bitcoin as a form of payment for products and services. Only a few countries have made it legal currency. The following is a list of some of the countries that have adopted virtual currencies and blockchain technology:

Japan

According to a recent video from CNBC, Japan has accepted Bitcoin as a legal tender.

Australia

Digital currencies will be treated like money for GST purposes, according to the Australian government’s Budget 2017-18. This would eliminate double taxation, as consumers would no longer have to pay GST to purchase cryptocurrencies and then pay GST again when exchanging these currencies for products and services that are subject to GST.

Belarus

Belarus has signed a Law on the Development of the Digital Economy, which states that mining, trade, capital gains, and other activities would be tax-free for the next five years, until January 1, 2023. 

USA

According to the US government, digital currency can be used as a form of payment in the country, just like an actual currency. It will not, however, be accepted as legal currency in any state.

Recent Update on Bitcoin (Cryptocurrency)

According to NDTV, the Indian government stated in a cabinet note that crypto exchanges will deal with crypto assets but will be supervised by the Securities and Exchange Board of India (SEBI). 

“It’s a fantastic development.” The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, can be submitted in Parliament once the cabinet approves the notice. Recognizing cryptocurrency as an asset rather than a legal tender is a wise move. Clauses and subclauses can be debated after the measure is introduced in Parliament. Given the complexities involved, finding an agreement will be difficult for both the Treasury and the opposition benches.