Bitcoins Legal Or Illegal in India?

- December 22, 2017

Is Bitcoin legal In India?

In 12th of April, Indian government declared that they convened a community for Bitcoin regulation. They said “they will be back within a 3 month with a final report”. It shows that Indian government also interested in the use of digital currency.

Media and many other sites propagating a misbelief that Bitcoin is not legal in India.which is not true.

There is no proper law regarding the use of Bitcoin and saying that it is not legal. But the Indian government is not supporting Bitcoin, which gives official legality to Bitcoins in India.

For instance, the company Zeb IT Service Pvt Ltd, sought for clarifications from RBI, DGFT, FMC

on their positions and guidelines on cryptocurrencies.

On 4th March, 2016, RBI replied that “bitcoins are not recognized as currency in India.”

On 31st May, 2016, RBI responded that the company “may seek clarification from DGFT

as to whether bitcoins can be considered as goods or services. In case the company intends

to trade in bitcoins as commodity, the said company may seek clarification from the Forwards

Market Commission (FMC).”

On 18th July 2016, RBI responded stating that “bitcoins / cryptocurrencies has not been

defined under section 2 of FEMA Act, 1999.”

On 22nd September, 2016, DGFT replied in a letter asking the Department of Financial

Services to take necessary action, as deemed fit.

The persons and/or entities dealing in cryptocurrencies have therefore complied with limited

regulatory processes currently in place and with the much more stringent self regulatory

processes formulated by them, drawing substantially from

Countries where Bitcoins Are Legal:

America
Australia
Africa
Israel
Pakistan
China
Hongkong
Japan
South Korea
Malaysia
Singapore
Uk

And there is many more countries where Bitcoins are legal.

Companies like WordPress,Microsoft,Amazon,Wikipedia and subway indirectly accept Bitcoins.

However, the Indian regulators, starting from the Reserve Bank (RBI) to finance ministry, have been extremely cautious in apprising the investors of the perils of investing money in bitcoins, among other digital currencies.

1. On December 24, 2013, the Reserve Bank of India (RBI) cautioned the users, holders and traders of virtual currencies, including bitcoins, about the potential risks that they are exposed to.

"The creation, trading or usage of (virtual currencies) VCs including Bitcoins, as a medium for payment are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities," the RBI had said in a press release issued in the 2013-end.

2. The RBI had stated five major risks of trading in bitcoins. The first is the fact that digital currencies, being in electronic format, are prone to losses arising out of hacking, loss of password etc. The second risk is the lack of any authorized central agency to regulate the payments or to turn to for redressal of grievances. The third is that there is no underlying of asset for VCs, making the value a matter of speculation. Fourth is that the exchanges are located in various parts of the world, making the law enforcement a tricky thing for the multiple jurisdictions available. Fifth is that trading may subject the user to illicit and illegal activities since the VCs, can easily be used for illegal activities anonymously.

3. On February 1, 2017, the central bank again reminded the users of risk involved in bitcoin trading. "The Reserve Bank of India advises that it has not given any licence / authorisation to any entity / company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk," said RBI in the released early this year.

4. On December 5, 2017, the RBI reiterated its warnings in wake of significant spurt in valuation of bictoins. "Attention of members of public is drawn cautioning users, holders and traders of Virtual Currencies (VCs) including Bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs," said the RBI.

Conclusion:

Many developed countries like U.S, U.K, CHINA using Bitcoin as a digital country. Also many big companies also planning to accept Bitcoin in future.

As there is no proper law About digital currency including Bitcoin, so no one can say Bitcoin Is legal In India. we can say it is unofficially legal in India.

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