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Is Cryptocurrency legal in India?


“Cryptocurrency”, is a buzzword these days in the financial market. A lot of people are showing interest in making investments in Cryptocurrencies. There are many cryptocurrencies available in the present market and people can invest in any crypto of their choice. If you look at cryptocurrencies and their investors, you will find out that most of them are from small cities and towns, rather than from big cities. But, along with this excitement, some people worry about whether it is the right investment or not. Apart from checking whether you will be able to make profits or not, you should also check is Cryptocurrency legal in India? 

So far, the legality of cryptocurrencies in India has been murky. There is, in fact, a booming blockchain market in the country, which has existed for at least five years. Currently, there are no laws or regulations prohibiting the use of cryptocurrencies in the country. In 2022, the Prime Minister arranged a meeting with senior officials. There are hints that the matter will be addressed with significant regulatory action. So, this blog will help you understand certain important points about the legality of Cryptocurrency in India:

It is very important to know whether any activity that you perform complies with the law of the land. It is the same with cryptocurrency as well. Above all, are you aware of pros and cons of bitcoin before investing. To understand this, let us take a simple example and that is the internet. It comes from free and people across the world use it every day and every minute of the day. But is it owned or controlled by any country?

No, it is not. And Cryptocurrency is also the same. It is not controlled or owned by any bank or country and hence no central bank like the Reserve Bank of India gives the validity of crypto as a tender.

No law prohibits cryptocurrency and at the same, it does not allow it as well. In simple words, it is like other commodities, gold and real estate in India. There is no law for trading gold in India, but still, people do it, and so will be the case of Cryptocurrencies as well. 

Currency Validity in India

None of the cryptocurrencies are valid in India. That simply means you will not be able to use or pay with the help of these cryptocurrencies in India, at this moment. In India, only the Reserve Bank of India will be able to issue any currency and anything else will not be accepted to sell or buy any products or services. But they are considered as a digital currency in India and can be used for trading here. 

Supreme Court of India about Cryptocurrency

RBI has prohibited all the banks, NBFCs, and all other payments that are under the control of RBI from making any kind of transactions that are related to cryptocurrencies.

This rule was passed in the year 2018 by RBI. But in the year 2021, Supreme Court squashed this. This judgment has allowed financial institutions to facilitate transactions relating to cryptocurrencies. That has helped many exchanges related to cryptocurrency come into the market. 

As of now, you are not breaking any law in India by trading cryptocurrency. The government has not introduced any regulations so far for cryptocurrency trading. The government is trying to come up with regulations related to cryptocurrency trading in India.

If at all anything is made, then it will be passed in the Parliament in a very short time. So, you will have to wait and see if India will come up with any regulations related to cryptocurrencies. 

Is it Safe to Trade Cryptocurrency in India?

When it comes to safety, then it is very much similar to any other kind of trading in India and across the world. They always come with a set of risks associated with them and hence you need to care your measures for preventing the risks and losses while trading.

Market risks are always present when you are trading, whether it is traditional trading or cryptocurrency trading. So, you need to first understand the law of the country or land where you wish to trade. Along with that, you should also understand the process of trading and the risks involved in it. In those ways, you will be able to keep yourself, your money, and your investments safe.

Why does bitcoin prices are highly fluctuating? The volatile nature of cryptocurrency is another important point that can affect your trading and lead to loss. Cryptocurrency is not illegal in India but make sure to keep a check on the latest updates on the same to keep your money safe. 

Final Words

When you ask is Cryptocurrency legal in India? According to a recent survey, about 100 million Indians own cryptocurrencies, making India’s crypto user-base the world’s largest. India’s government is one of the countries considering legislation to regulate cryptocurrencies, which are currently unregulated in the country despite significant investment.

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