Bitcoin is one of the fastest-growing and exciting options amongst investors in India. This digital currency is ruling the Indian market and generating enthusiasm and fire amongst retail investors. India is estimated to have 10M+ crypto investors and this number is increasing day by day. Bitcoin is a creative payment network that is based upon crypto technology. It has created a new path for sending and receiving payments through the internet. In India, the value of bitcoin is worth Rs 26 lakhs. It means that with a single bitcoin, a normal Indian man can buy a 1 BHK flat in the metro city.
As per the CoinDCX report, Indian investors aged between 25 and 40 are highly investing or spending on bitcoin. However, one of the biggest crypto exchanges of India, WazirX has seen a 125% increase in their sign-up in the past 6 months. As far as its legacy, bitcoin is not illegal to sell, buy, or trade in India. Also, there are no official regulations made by the central authority in India for Bitcoin. But, in the future, it’s expected that the Indian government might impose some guidelines for controlling and tracing Bitcoin in the country. But bitcoin should be invested after the whole investigation because if it’s not invested securely and properly, then the investor might need to bear losses. Before moving further to discuss the legality of bitcoins in India, let us look into their meaning.
Bitcoin – the evolving digital currency
Bitcoin is a digital currency that operates without any interference from banks and the government. It relies on peer-to-peer software and cryptography technology. Bitcoin was created in the year 2009. This digital currency promises its lowest transaction fees than that of online payment systems. It is also managed by the decentralized authority which is not like government-issued currencies. One cannot operate bitcoins like physical cash. It can only be balanced on the public ledger through which it can be accessed transparently. Bitcoin is one of the safest investments one can look for in the crypto market. As per the latest reports, up to June 2021, 18 million bitcoins were mined successfully.
Bitcoins work on the technology of blockchain which is the new way of organizing data. Because of this technology, Bitcoin is not relying on government and geographic borders. It utilizes blockchain technology and encryption keys for connecting buyers and sellers. Bitcoins can be used as a payment mode for big and international businesses. While for small businesses, it offers the third party free medium of transaction which helps in reducing expenses on exchange feed and transaction charges. And currently, more than 1,00,000 merchants are receiving payment in bitcoins right from food to heavy machinery.
Bitcoins and its legal positions in India
As told earlier, bitcoin is not illegal in India for buying, selling, trading, and mining. When Bitcoin starts regulating at a big level in India in the year 2017, many technological retail investors have started investing here. But there are certain false investors also exists who are taking the advantage of bitcoin in the wrong way. That’s why in 2018, the finance minister has started ” the government is not considering bitcoins as legal tender or coin and will adopt all the measures of eliminating crypto-assets in financing “illegitimate activities”.
This statement is being followed by an RBI circular. That’s why it’s suggested to all the government entities to stop offering any service with this digital currency. The Indian government was never against this digital technology. But they intended to prevent any wrong use of crypto and blockchain. In the year 2020, the advancement of crypto regulated in countries US, Singapore, etc has made Indian authorities remade this decision.
Hence, the Supreme court of India has retraced the RBI circular 2018 and allowed HDFC Bank, Yes Bank, ICICI Bank, and state bank of India to allow transacting with bitcoins.
Therefore, it can be concluded that Bitcoins are legal in India for buying, selling, trading, and mining. However, its illegitimate activities led to its banning before, but in the year 2018, it became legal tender.