“ There are 3 Eras of currency : Commodity based currency , politically based currency and Crypto currency i.e virtual currency “
Even with the increase in the trading of Cryptocurrency (Virtual/Digital) among traders in India, the legality is still in question. The issue is that India does not recognize crypto currency as legal currency.
Recommendation regarding this has been made to the government. The government position is clear “we don’t recognize this as a legal currency as of now”. There is no regulation governing virtual currencies, including bitcoins, etherum, etc in India. RBI does not provide license for the same to any entity to operate such currencies.
The major legal issues in relation to Cryptocurrency are:
- Money Laundering
- Hiding Assets
The bitcoin is known all around the globe. The countries like Switzerland and Mexico have also incorporated in their financial system. It shows that there is a great potential for growth and incorporation into framework into existing financial system. In India, the discussion on this is going on. Recently Department of Economic Affairs constituted a committee with representatives from DEA , DFS , RBI, Niti Ayog. The Committee has submitted its report to government and it is taken up for consideration and examination.
It might be possible that India will make it legal in near future, by amending the legislation, to put restriction on above mentioned legal issues with respect to cryptocurrency. If cryptocurrency popularity increases further, India may regulate this. The major legislations that would undergo amendment are RBI Act, 1934; FEMA Act etc.
This post has been contributed by Saransh Vijay, a penultimate techno legal student at School of Law, UPES University.
Image from here.