Cryptocurrency Future In India

Cryptocurrency Future In India:

Over the time, popularity of internet technologies, virtual currency – called cryptocurrency has also been invented. A popular form of cryptocurrency is bitcoin. As Bitcoin became so popular nowadays, people started investing and trading in it across the globe even though the trade was not regulated. Trading in an unrestricted sector can lead to money laundering, fraud and even terrorist funding. This popularly increasing new sector also requires tax reforms to account for the incomes being produced by the consumer. However, there was no current protection – neither for consumers nor for business.

Is Virtual Currencies Legal In India?

Acting in the concern of consumers, the government advised people about the risks in trading with virtual currencies stating that virtual currencies are not a valid legal offer in India. The Reserve Bank of India (RBI) via its notification dated 06.04.2018 banned dealing of virtual currencies in India. Hence, consumers could neither process nor settle their cryptocurrency transactions.

Government Decision On Crypocurrency

There is now a small hope for consumers in India that the cryptocurrency trading may start again. As per the latest judgement by the hon’ble Supreme Court of India in case of Internet and Mobile Association of India v. Reserve Bank of India3 , the court set aside the RBI notification dated 06.04.2018 on the grounds of proportionality. As the court highlighted that “In case the said enactment (2019) had come through, there would have been an official digital currency, for the creation and circulation of which, RBI/Central Government would have had a control.” The 2019 draft enactment Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 20195 prohibits mining, holding, selling, trade, disposal and use of cryptocurrency in the country. However, the said draft bill allows the government, in consultation with the RBI, to issue digital currency as legal tender.

Like Japan, there are many other countries which have regularised cryptocurrency in their respective jurisdiction. For Instance , Canada doesn’t treat virtual currency as a legal tender but allows trade of those currencies. This not only allows virtual currencies by legalising as a money service business for cover from concealment . However, there are many countries which are recognizing this activity and are successfully ready to tax the traders.

Countries Not In Favor Of Cryptocurrency

The above instances from various countries show that there are some ways to manage this commercial activity. There are many challenges ahead in regulating this commercial activity . The 2019 enactment introduced by China prohibits the trading of cryptocurrency. China’s introduction of Digital Rupee step is analogous to what China did. The Chinese government banned virtual currency and is getting to introduce its own first digital currency.

From India’s perspective, a serious point for consideration is that introduction of Digital rupee as a tender could also be some extent of conflict as by way of banning other virtual currency and introduction of Digital Rupee, the govt may have monopoly during this business. The hon’ble Supreme Court of India has noted this aspect while discussing this issue but evaded discussion thereon by stating that such a situation has not yet arisen as enactment remains during a bill shape.

Why can’t India not regulate these currencies

This further brings specialise in an enormous question that why can’t India not regulate these currencies almost like other countries by amending taxation laws, exchange Management Act (FEMA), 2016 etc, and also appointing an authority like RBI or (Securities and Exchange Board of India) SEBI over this business, as just the introduction of digital rupee doesn’t guarantee that there’ll be no frauds or laundering. the longer term of cryptocurrency lies totally within the hands of legislature, whether to ban the currency or not. aside from this, we’d like to require a choice for the way forward – the introduction of digital rupee or to regularize the world . this is often the necessity of the hour to form it a viable opportunity for investors and consumers.