What is the future of cryptocurrencies in India??
Cryptocurrency sceptics say there is good reason to believe that governments around the world will eventually ban all cryptocurrencies. They argue that governments and their central banks will not allow the dilution of their monopoly power over money.
The Indian government has been giving conflicting signals on this matter. Finance Minister Nirmala Sitharaman in March said that there won’t be a total ban on the use of cryptocurrencies in the country. But the Centre soon plans to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which is said to contain provisions completely banning the use of all cryptocurrencies. The future of cryptocurrencies in India, thus, still hangs in the balance.
Is cryptocurrency legal in India??
While there has been talk of the Indian government planning to put a blanket ban on crypto in India, it is not yet illegal to purchase cryptocurrencies in India.
The RBI, in a circular from 2018, had prohibited all the financial institutions regulated by it, to stop dealing in cryptocurrency transactions. Following that, a government committee in 2019 suggested a blanket ban on cryptocurrencies, with plans to implement a jail time of up to 10 years for dealing in cryptocurrency.
However, in a landmark judgment by the Supreme Court in March of 2020, this ban on cryptocurrencies was overturned. This meant that Indians could freely invest in Bitcoin and similar cryptocurrencies.
However, there has been a resurgence of talk about a potential ban on cryptocurrencies in India, which would be truly counterproductive. But there might still be some hope of regulation of cryptocurrencies in India’s future.
What it's legal status in India??
Cryptocurrencies are not illegal in India. So if you want to buy, let's say Bitcoins, you can do so and start trading in it. However, India does not have a regulatory framework to govern cryptocurrencies as of now. The government had constituted an Inter-Ministerial Committee (IMC) on November 2, 2017, to study virtual currencies. The Group's report, along with a Draft Bill, flagged the positive aspect of distributed-ledger technology and suggested various applications, especially in financial services, for its use in India, including banks and other financial firms.
However, the Centre had flagged reservations around its misuse and wanted to put a blanket ban in India. Latest reports say cryptocurrency may not face a complete ban in India. The Centre may soon set up a panel to regulate them. The decision was taken after several cryptocurrency exchanges urged the Centre to regulate virtual coins rather than banning them.
Is govt working on digital currency??
While the government has some reservations regarding cryptocurrencies, it is also working on its digital currency. The government does not want to be left behind in the new age tech revolution and aims to cash in on the benefits blockchain technology offers. "The time has come to leverage its applications while at the same time strengthening the digital infrastructure," Reserve Bank of India (RBI) Governor Shaktikanta Das had said in February while announcing that RBI is working on its digital currency.