India is soon to take on China as the world’s most populous country, but its vast population has also translated into a massive cryptocurrency user base. At present, millions of Indians actively trade in cryptocurrencies. If you check some notable crypto exchange platform’s user statistics, you will be amazed to see how well Indians have adapted to cryptocurrency trading.
From total transactions increasing to billions of dollars, the Indian cryptocurrency market is all set to elevate to greater heights. But does high trading volume imply that cryptocurrency is legal in India? Well, many crypto enthusiasts have been in a dilemma on whether to invest in cryptocurrency or not owing to its legal status in the country.
Many even delayed early investment opportunities at attractive prices contemplating whether such investments would land them in a legal soup. To know is Bitcoin legal in India or are other cryptocurrency investments, make sure you read till the end. If you’re fascinated by the cryptocurrency world and are willing to make your first investment, this guide is here to help.
Owning Cryptocurrencies as Indians
If you check the current condition, you won’t find any sound legal framework in India regarding cryptocurrencies. The government has imposed high taxation rates on cryptocurrency transactions. But it is yet to formulate strong legislation for the buying and selling of cryptocurrencies. You can best understand it with a real-life example. If you ever in the future encounter an unpleasant experience with a banking institution, you can contact an ombudsman for grievance handling. But there is no such authority to contact if you ever fall prey to an unreliable cryptocurrency exchange platform.
Even though Indian law doesn’t have any sound framework for cryptocurrencies, it doesn’t mean owning this asset class is illegal. You can invest and own your favorite cryptocurrencies as long as you pay the required taxes. The rapid rise of cryptocurrency exchange platforms is a good indication towards cryptocurrency ownership. The lack of regulations may make you fearful of your investment; hence, always invest if you have a decent risk appetite.
The government is contemplating framing strict rules guiding cryptocurrency ownership and trading, but only time will tell more about the government’s stance. It earlier had plans to ban cryptocurrency altogether, but the popularity prevented the authorities from doing so. However, fear still looms over the cryptocurrency space in India as the chances of introducing a strict legal framework cannot be entirely overruled. You can keep checking a reliable crypto law blog to get real-time updates on what the government is planning to propose.
Cryptocurrency as a Legal Tender
Even though it is not really illegal to own cryptocurrency in India, the restrictive nature of use may make its ownership undesirable to some. It means you cannot have dinner at a restaurant and expect to pay the bill using your cryptocurrency. Some merchants have started to accept cryptocurrency as a viable mode of payment; the number of such merchants is less, especially in India. The chances of the government recognizing cryptocurrency as a legal tender are highly unlikely.
Another drawback is that you cannot visit any commercial bank and ask them to convert your owned cryptocurrency into cash since it is not a legally accepted tender. To facilitate such transactions, you will have to take the help of a crypto exchange platform. Very few countries have given cryptocurrency the status of a legal tender, but we don’t see any other country following suit anytime soon.
India has even considered creating the country’s first Central Bank Digital Currencies (CBDC). They will be similar to cryptocurrencies, but the only differentiating factor is that they will be centralized and backed by India’s central bank. Currently, the government hasn’t released much information on CBDC, so we will have to wait until authorities release more details in the future.
How to Safely Invest in Cryptocurrency in India?
Now that you’re aware that cryptocurrency ownership is not illegal in India, you can proceed and make your first crypto investment. To ensure a smooth buying process, choose a reliable crypto exchange platform with excellent reviews. You can consider joining online cryptocurrency communities, groups, and forums to get unbiased exchange recommendations from existing users. Once you’ve shortlisted the exchange, select the cryptocurrency you want to purchase. Then make the payment to begin your cryptocurrency trading journey.
Invest Securely for Good Returns
Cryptocurrency investment can be profitable, but it doesn’t mean you ignore the volatility and risks attached to it. The more cautious and informed you are, the better. If you want to earn some profits from your cryptocurrency trading or investment journey, always conduct enough research and analyze your risk profile before making any investment.