Article Index:
1. Introduction
2. What exactly is a Cryptocurrency?
3. Is it supported in India?
4. What were the regulations presented by this committee?
5. So, is using Bitcoins legal in India?
6. How is Bitcoin bought in India?
7. Conclusion
Introduction:
Bitcoins is one of those digital currencies which have taken the whole world by storm. Even in India, it was about to keep its footsteps firmly when suddenly a banking ban initiated by the Reserve Bank of India (RBI) took Bitcoin into reverse gear.
The Reserve Bank of India issued a notice that whoever or whichever entity which is under it shall not provide services regarding these virtual currencies to either individuals or business entities.
Soon after this announcement, most of the investors in India have become quite cautious about using Bitcoins. And it is because of this ban, Bitcoin, which is only one of the earliest digital currencies, is still to find dominance in Indian markets. This Bitcoin currency got introduced in the year 2009 by an unknown person or group called Satoshi Nakamoto.
What exactly is a Cryptocurrency?
Cryptocurrency, or in other words, digital currency, is a type of money that is digital and uses cryptography to provide security in its transactions. Cryptography is a method in which the comprehensible data obtained gets converted into complicated digital codes that are tough enough to crack.
So as said before, Bitcoin is just like digital cash. You can spend it, but you cannot feel it. Each Bitcoin is a computer file that gets stored as a ‘digital wallet’ app on the computer. The most economical use of Bitcoin is that people can exchange it with each other or send it to the digital wallets of one another.
Here, every single transaction which happens through Bitcoin gets recorded in a public list. This Public list gets called as blockchain.
Because of the presence of this blockchain, it is easier for people to trace the history of their transactions. In fact, through this feature, they can easily prevent other people from spending their coins or making digital copies of the coins they possess.
It is true that after Bitcoin got introduced, the number of digital currencies has rapidly increased around the world. Today, there are many other digital currencies like Bitcoin, which include Zcash, Ethereum, Litecoin, Ripple, Dash, and many more.
Bitcoin India: Is it supported?
Coming to this point, India never has a decisive stand towards Bitcoin or any other virtual currencies. This attribute is mainly due to the decentralized nature of these virtual currencies and also the invitation they possess for various threats and scams.
The Government had appointed a panel to investigate the usage as well as the disadvantages associated with digital currencies. This high-level Government level after examining the pros and cons related to Bitcoin thoroughly duly recommended a ban on all sorts of digital currencies in the country.
What were the regulations presented by this committee?
The committee made a detailed report of the usage of cryptocurrencies and submitted it on 23 July 2019. Along with the announcement, the committee introduced a draft bill, which was then given the name ‘Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019’.
The whole report, along with the features of the new bill, is present on the website portal of the Department of Economic Affairs.
The committee, along with the ban, has also stated a fine of 25 crore Indian Rupees for using cryptocurrencies, which also includes imprisonment of 10 years. This punishment may get levied to any individual or company participating in any activity related to the virtual currencies.
Even before, the Reserve Bank of India (RBI) has cautioned the citizens residing in India over the use of digital currencies. Though the Central Government is has determined to eliminate the usage of cryptocurrencies, citing it is illegal, it has not yet banned Bitcoins in the country.
So, is using Bitcoins legal in India?
Though India has not banned the usage of Bitcoin, yet, we cannot state the usage of it to be completely legal. Using Bitcoin in India comes with its own rules regulations, which have to get duly followed.
There is no blanket ban on Bitcoins in India now, and the rumors spread around are just the recommendations of the committee, and the Government has not yet formulated any law till today.
Due to this attribute, the Supreme Court of India has announced in a ruling that the Indian Government should come up with some regulation policies regarding cryptocurrencies. This ruling came into effect on 25 February 2019.
How is Bitcoin bought in India?
Before the ban was imposed by the Reserve Bank of India, Bitcoin could be purchased through various digital currency exchangers like CoinDelta, ZebPay, CoinSecure, and other exchanges by using your credit card or linking your bank account. you could buy Bitcoin to INR by paying the price of Bitcoin in Indian Rupees.
Unocoin, another India-based exchange, also allowed individuals to trade Bitcoin. It helped individuals in buying, selling, storing, using, and accepting Bitcoin. However, soon after, RBI imposed its restrictions, withdrawals, and deposits on these exchanges were permanently closed. The only method that people are currently using to buy or sell cryptocurrency is using localbitcoins.
Conclusion:
Though the restrictions are still in place, many users today still trade Bitcoin through localbitcoins.com or through family or friends who are residing in other countries where Bitcoin is legal.
So, the final nail in the coffin is that the usage of Bitcoin is legal in India. Though it is illegal if you use Bitcoins under the banking sector, which is buying or selling Bitcoins from any bank or firm registered under RBI. Still, in India, you can find many exchanges and digital currency wallets from where Bitcoin or other virtual currencies can be bought easily.
