Crypto currency legal in India ?
supreme court has struck down rbi ban on crypto but rbi still has not made it recognised currency.
there was this recent report which says government is looking to pass a bill to ban cryptos in India…
The crypto exchange is legal in india. The SC lifted the ban very recently.
Crypto currency is legal in India after the Supreme Court struck the RBI ban on cryptocyrrency circular citing that it is against the right of people to do so. But it’s still in a gray area.
The thing is, the government wants it to be banned due to to some of their bullshit reasons. Now even if it is legal as it is now, seeing just how ungrateful the government is and their efforts to curb it, companies don’t want to take that risk. Because when the government doesn’t like what you do, they make your life difficult and this is something that you can’t afford when running a business.
There’s a common misconception that the Supreme court overturned the RBI’s ban on cryptocurrency, which makes crypto legal in India. The actual position is more nuanced than that.
The RBI’s ban was never on crypto trading itself. What the RBI’s circular (see here) said was that entities regulated by the RBI (Such as banks, NBFCs, payment service providers etc.) would not be allowed to have any transactions relating to virtual currencies. The ban was thus on financial institutions, which were banned from settling any crypto-related transactions in rupees. This ban on RBI-regulated entities was overturned in early 2019 by the Supreme Court.
The onus to regulate cryptocurrencies is actually on the Government, not the RBI. Since the government hasn’t passed any regulations governing crypto yet, the industry construes this to mean that crypto is legal until the government explicitly bans it.
That said, the Ministry of Finance has taken a pretty strong stance along the lines of ‘Blockchain is good, Cryptocurrencies are bad’. There is a draft legislation which is currently under discussion, which seeks to ban cryptocurrencies outright in India, and has some pretty strong penalties (10 year jail terms etc.)
The industry is lobbying for a relook at the draft legislation. While they’ve succeeded in planting the seed of doubt in the regulator’s minds, whether the industry succeeds in convincing the government of the benefits of crypto is anyone’s guess at this point.
All in all, this is a pretty grey area right now from a regulatory perspective.
Don’t think this will pass through since neither bitcoin is good nor service. And even if they levy gst this will mean that they have legally accepted trade and use of bitcoin or other crypto in India and will indirectly promote cryptocurrency,so this too doesn’t make sense. Lastly cryptos are about decentralisation and all so there is probably very little chance of anything like this happening.
I found a news article about this, according to it -
According to finance ministry sources, CEIB has suggested that bitcoins can be categorised under ‘intangible assets’ class and a GST levy could be imposed on all transactions. The board has suggested that the cryptocurrency can be treated as current assets and GST charged on the margins made in its trading.