With time, the popularity and usage of cryptocurrency are growing and this is a global trend. The stance of Indian govt on legality of cryptocurrency remains somewhat unclear. However, that has not deterred the growth of this sector in India. If you are thinking of investing in any crypto coin or using any Indian crypto exchange, it is better that you have a clear idea about the newest developments taking place in this regard.
The present state of the crypto sector
The cryptocurrency sector can very well be compared to the internet. The latter is used by billions of people every day but no one owns the internet! The Cryptocurrency sector is neither owned nor controlled by any bank or govt, as such. In India, any Cryptocurrency is not issued or validated by the RBI. However, the laws do not prohibit trading in crypto either. So, you can compare cryptocurrency with assets like real estate or gold.
Since cryptocurrency is not deemed as a valid currency in India, you cannot directly pay with it for anything. Crypto coins are minted globally by a complex and decentralised network, which has P2P mechanism behind it. However, you can use these exchanges to buy fiat currencies using your crypto coins and that can be used to buy services and products.
The stance on cryptocurrency taken by the apex court
The nascent crypto sector in India faced a big blow in 2018. The banks, NBFCs and allied payment systems were barred by RBI from enabling financial transactions for cryptocurrency coins. This ban was later cancelled by the Supreme Court of India. This has aided the growth of the industry in India thereafter. After March 2020, more crypto exchanges have come up in India.
So, is trading in cryptocurrencies in India illegal?
The answer is no. There is no law that prevents you from treading in crypto coins in India. A special bill on cryptocurrency regulation is being prepared by the central govt but it is yet to be cleared.
What the Indian crypto sector veterans say on this?
As the govt is yet to make its stance on Cryptocurrency regulation in India clear, the industry veterans have already expressed their views on the subject. A lot of them have a positive outlook on the topic. WazirX Founder, Nischal Shetty is one of them. He says the Indian govt at least has shown its interest in the subject which is positive. The FM has said India will adopt a calibrated approach towards crypto regulations. So, it is unlikely that it will impose a blanket ban on usage of crypto coins as was feared by a section even a few years back. It can be like the TRAI regulations which involve industry inputs before forming any regulation.
India’ s Parliamentary Standing Committee’s chairman Jayant Sinha has said India’s cryptocurrency bill is expected to have a unique approach. It will not be like the nations like El Salvador or Japan, for example. India has its own set of circumstances and hurdles and those will be analysed well before forming the crypto regulations.
While the ambiguity and lack of clarity on crypto regulations in India has made serious investors worried, a majority of them bat for the implementation of such regulations. Unless the fast-growing sector is monitored by a regulatory entity, problems like money laundering and cyber-crime will seep in. The association of the sector with the dark web and terrorism financing are issues that necessitate regulations. With well-planned and robust crypto regulations in place, users of every type will benefit in the long run, including the govt.