A cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their currencies, often called tokens, and these can be traded specifically for the goods or services that the company provides.
Cryptocurrencies work using a technology called the blockchain. Blockchain is a decentralized technology spread across many computers that manage and record transactions.
India on cryptocurrency
WazirX, a cryptocurrency exchange platform, has shown that more than two crore people own cryptocurrencies in India. According to a source, Indians have invested around $ 6.6 billion in cryptocurrencies till May 2021.
This saw an over 600% jump from $923 million in April 2020. At present, over 350 startups are operating in the blockchain and cryptocurrency space.
Is Cryptocurrency Legal in India?
At present, no legislation covers cryptocurrencies in India. However, that does not make cryptocurrency illegal in the country. It simply indicates that there is no regulatory framework to safeguard cryptocurrency owners in the country.
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Cryptocurrency Bill
To solve the question of cryptocurrency being legal in India, the central government is all set to launch the Cryptocurrency and Regulation of Official Digital Currency Bill in Parliament.
The new bill will aim to prohibit private cryptocurrencies while providing a framework for creating an official digital currency by the Reserve Bank of India.
There might be certain exceptions to promote cryptocurrency’s underlying technology and its uses. It might also create a facilitative framework for creating the official digital currency to be issued by the Reserve Bank of India.
Can Cryptocurrency Be An Asset?
Reports say the Centre may recognize it as an asset, like real estate, stocks, or gold. Then, the government will levy capital gains tax on any profits made after selling cryptocurrencies.
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Private Cryptocurrencies
The founder of India’s first and oldest Blockchain Cryptocurrency Publication, Hitesh Malviya, said many uncertainties about how private cryptocurrencies will be defined.
Cryptocurrency as a Legal Tender
A few countries, including El Salvador, have accepted cryptocurrency as a legal tender. But the central government has not allowed cryptocurrency as a legal tender in India. This means that people can not go to a restaurant, have a meal and pay in cryptocurrency.