Yes, Bitcoin is legal in India. But, there’s a catch. Read on.
In this article, we’ll try and get an answer to whether Bitcoin is legal in India or not.
The Indian government has legalized digital currencies by issuing a press release. An excerpt from the statement, dated February 1st, 2017, issued under the PIB shows just how open the Indian market is becoming to crypto-currencies:
“Consequent upon the Union Cabinet proposal to amend the Payment and Settlement Systems Act 2007, Government of India have constituted an Inter-Disciplinary Committee chaired by Special Secretary (Economic Affairs) with representatives from Department of Economic Affairs, Department of Financial Services, Department of Revenue (CBDT), Ministry of Home Affairs, NITI Aayog and State Bank Of India.”
“The Committee will (i) take of the present status of Virtual Currencies both in India and globally; (ii) examine the existing global regulatory and legal structures governing Virtual Currencies; (iii) suggest measures for dealing with such Virtual Currencies including issues relating to consumer protection, money laundering, etc; and (iv) examine any other matter related to Virtual Currencies which may be relevant.”
Also read: Best Apps to Buy Bitcoin in India
The press release goes on to state that “it has been decided to rope in Bitcoin in the proposed committee”, thus making bitcoin one of very few digital currencies currently being regulated by Indian law.
The statement then goes on to say that “the Government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegal activities or as part of the payment system.”
“Further, Reserve Bank has also advised that it has not given any license/authorization to any entity/company to operate such schemes or deal with Bitcoin or any other virtual currency.”
Earlier, the Finance Minister told the Lok Sabha that the government does not gather data on Bitcoin transactions.
So, is Bitcoin legal in India?
And so bitcoin remains very much unregulated in India. But what precisely does this mean for Indian bitcoin investors? Is the future looking even brighter than ever before?
Not necessarily. Digital currencies are still currently unregulated in India, which means that while bitcoin is now legal, there’s no protection against fraud nor guaranteed reimbursement in the case of a hack.
In addition, none of this is specifically positive news. For instance, while bitcoin has been legalized, there is no regulation on it yet. In consequence, any illicit activity conducted with bitcoin could lead to criminal charges against the participants.
The usage of cryptocurrency is still unregulated in the nation. The Supreme Court of India overruled the Reserve Bank of India’s (RBI) ruling forbidding banks from enabling crypto transactions.
So, can you make money investing in Bitcoins in India?
Yes, you can start investing in Bitcoin wallets and enjoy the valuations.
But, Bitcoin isn’t legal tender in India yet. This means you cannot withdraw your “cash” or use it to buy things at the moment (or withdraw to your bank account for that matter.
Reference – Wikipedia
How to Invest in Bitcoin in India?
So, if you wanted to go ahead and invest in Bitcoin in India, despite the risks involved, here are the steps.
1) Create a bitcoin wallet to start off with.
For this, you can use any of the popular bitcoin wallets available for Android and iOS. One popular example is Zebpay, which I have been using myself for a couple of years now. You can create an account on Zebpay from your smartphone by scanning a QR code or entering a Bitcoin address, just like in PayPal. Once you have created an account, follow the instructions below to deposit money into it:
2) How to transfer money into your Bitcoin wallet?
You can do that through bank transfers or through services such as NEFT/IMPS/RTGS. In addition, you will also need to add your bank’s address in order to link your Bitcoin wallet to your bank account.
3) How to buy Bitcoin in India?
Once you have linked your bank account with a Bitcoin wallet, you can transfer money from there to buy Bitcoin. Currently, the price of Bitcoin in INR is hovering somewhere around 60k or so, but it keeps drastically changing every day. You can purchase Bitcoin by following the instructions below:
Once Bitcoin has been transferred into your Zebpay wallet, you can either keep it there and wait for prices to go up further before selling them off, or you can sell it immediately through services such as LocalBitcoins. This way, you can convert Bitcoin into real cash that is used for making purchases online! However, if transferring money back into your bank account is a problem for you, then you can use the Zebpay voucher system. How does that work?
Future of Cryptocurrency in India
What I feel is that cryptos are the ultimate future of money since they have a finite supply. What would happen if everyone starts using cryptos? What will happen to fiat currencies then??
Cryptocurrencies will become the new norm for online transactions from business deals, to our day-to-day purchases. It will be beneficial for both the consumer and business.
As of now, there is no official regulation for cryptocurrencies in India. What the present government has been undertaking is to establish a committee to analyze and give suggestions on how to regulate the market based on Blockchain technology.
We have a lot of hope from our Honorable Prime Minister Mr. Narendra Modi that he will take a firm step towards regulating cryptocurrencies in India. What I feel is that the market should be left open without any regulations since it’s an emerging technology. What will happen to e-commerce in India if we impose such policies??
India has a low GDP and very few countries support cryptocurrencies as of now. What will happen when bitcoins’ price increases? What about cryptocurrencies? Are they going to be legal tender in India? What about the upcoming cryptocurrencies?
What I feel is that it should all be left open until we have enough knowledge and research on them. What will happen if cryptocurrencies are banned?? What will happen to the crypto exchanges?? What will happen to the future of cryptocurrencies then?
Let us wait and watch.