Legal Status Of Bitcoin In India | Does It Really Need Strong Regulations?

If we talk about the legal status of Bitcoin, or cryptocurrencies in general, then there are many countries out there who have already legalized the use of Bitcoin for payment and trading purpose. Some of these countries are Canada, Australia, Israel, Japan, Singapore, Belgium and many other European Countries.

But there are some countries where Bitcoin is actually banned. These include Bangladesh, Bolivia, Ecuador, Iceland and China.There also exists some countries where Bitcoin has neither been given a legal nor an illegal status. One such country is India.

India the second most populated nation after China is still deciding over the use and legal status of cryptocurrency within the country itself. India is a developing country and climbing very fast on the ladder of development. India is also adapting to the digital mode of payments very fast as the Indian government is looking forward to make country Cashless India where majority of transactions would be done through digital methods.

Recently India demonetized the higher denomination currency in order to take control over black money reserves and implying legal control over tax evasion. The general population accepted this decision wholeheartedly and started using digital mode of payments. So, we can say that India could really use a digital mode of transaction in near future.

The facts that go in favour of Bitcoin are,that it is digital, very fast and has low transaction fee. Also the popularity of Bitcoin is also rising rapidly in India as more and more people are investing in cryptocurrencies and now a lot of crypto exchanges have opened too, providing Bitcoins at a reasonable amount via fiat currency.

But still, the legal status of Bitcoin in India is not clear. It is neither illegal nor legal. That means people can keep investing in cryptocurrencies until government can come up with some regulations or laws to regulate it's mass adoption by the general public.

Recently, Mr. S P Sharma, chief economist at PHD Chamber Of Commerce & Industry raised his concern over the mass adoption of cryptocurrency and it's legal status in India.

He quoted these words in his statement:

Unless the cryptocurrency is properly and comprehensively regulated and monitored by a robust institution, I don’t see bitcoin becoming a legal currency in India.

So, basically he wanted to say is: India needs some regulations over the mass adoption of cryptocurrency or there will not be a future of cryptocurrency in India or it will remain illegal.

The Finance Ministry of India recently appointed a committee including the members from taxation department, the reputed staff of Reserve Bank Of India (India's Central Bank) and other finance domain experts to make a framework about the cryptocurrency infrastructure and it's possible future in India. This committee will make a report and submit it back to the Finance Ministry, on the basis of which the legal status of cryptocurrency in India will be decided.

Cryptocurrencies are actually prone to more speculation than a medium of exchange or way of transaction these days. Everyone is trying to use cryptocurrencies for speculation purpose and that's why Indian government are trying to come up with some regulations in order to control this high speculation and make a proper system where use of cryptocurrencies must coincide with proper taxation rules and proper legal status.

Let's see next what India will decide over the cryptocurrency legal status. Will it legalize it or just ban it like China and other countries?

The impact will be crucial for Bitcoin valuation either way.

Thank you.

Author @cryptonet

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