For a long time, there have been clouds of confusion over the legal status of Cryptocurrencies in India. But now the Government of India has listed a bill that may ban all the private cryptocurrencies in India like Ripple, Ethereum, and very popular Bitcoin.
In addition, a legal framework may also be put to introduce India’s own official digital currency. As per RBI, the officials are brainstorming if a digital version of the rupee will have a space in the technology market. Let’s explore some facts about Cryptocurrency first.
What is a Cryptocurrency?
Cryptocurrency uses a technology called the blockchain. It is a kind of digital currency that could be used for the exchange of goods and services online. Blockchain technology helps to manage and record transactions across many computers.
Bitcoin ($563.8 billion), Ethereum ($142.9 billion) & Tether ($25.2 billion) are the top three cryptocurrencies by market capitalization.
The legal status of Cryptocurrencies in India
In the year 2018 following the demonetization, there were many reported cases of frauds which led the Reserve Bank of India to impose a ban on the use of bank channels for payments of any cryptocurrencies.
However, the honorable Supreme Court of India overturned the ban in March 2020 mentioning that RBI Regulated Entities failed to prove the loss due to transactions of cryptocurrencies.
As for now, there is no described law to regulate virtual currency. Therefore, we can say that it’s neither banned nor legally approved.
But if the proposed Cryptocurrency and Regulation of Digital Currency Bill 2021 is passed, cryptocurrencies including Bitcoin will be banned in India.
What will be the future of Bitcoin in India?
It is speculated that the currency Bitcoin is the brainchild of Satoshi Nakamoto of Japan. On the other hand, there are some people who believe that it was Tesla’s Elon Musk who invented the Bitcoin. Recently the prices of Bitcoin soured up 14% after Elon Musk added #Bitcoin to his Twitter bio.
Today a Bitcoin may cost you over 34,000$ (24.76 Lakh Rupees) but till 2010 its value was not over a dollar.
As per countries (India) leading Currency Exchange CoinDCX, 80% of the investors are of the age group 25 to 40. Each day there are transactions worth 290,00,000 Rupees.
With over 7 million crypto holders and assets worth over $1 Billion, Indians have so much on stake, say Crypto industry professionals. They are expecting the government to understand their views and points before making any decisions. Banning Bitcoin or all cryptocurrencies overnight may result in a panic amongst the stakeholders. In 2018 also, RBI provided a window of time before imposing a ban on digital currencies.