RBI had advised all the entities regulated by it not to deal with virtual currencies or provide services for facilitating any person or entity in settling them. However, the Supreme Court set aside the RBI circular on March 4, 2020. Since then, cryptocurrency has been one of the most talked-about investment options. But there are fears that the Government may legally ban the virtual currencies being traded right now. Officially, the Government does not consider cryptocurrencies as legal tender.Even as there is no complete legal backing for cryptocurrencies, including Bitcoin, they are gaining popularity in India. Through a circular in 2018, the
Replying to a query in the Rajya Sabha last week, Finance Minister Nirmala Sitharaman said, “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 illegitimate activities or as part of the payment system.”
However, the Finance Minister said that the Government would explore the use of blockchain technology proactively for ushering in a digital economy. She said that a High-Level Inter-Ministerial Committee (IMC) has recommended that all private cryptocurrencies be prohibited in India, except any cryptocurrency issued by the State. “The Government would take a decision on the recommendations of the IMC and the legislative proposal, if any, would be introduced in the Parliament following the due process,” Sitharaman said.
Notwithstanding the legal status of crypto, or virtual currencies, individual investors across the country are excited about its prospects. To give them a clear picture, we talked to some experts for insights on risks, safety, legal status, and the expected future of cryptocurrency in India.