What is Cryptocurrency?
Cryptocurrencies are digital assets which can also be used as form of payment as it use cryptography to secure the transactions. Cryptocurrencies use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger. The first cryptocurrency to capture market is Bitcoin.
Bitcoins are result of process of mining and are relied on cryptographic algorithms for security purposes. There is shift in the interest of the investors from other financial assets, commodities, gold etc to the Bitcoin market in India and it has gained a huge market base in India. There is a total of 9 Bitcoin exchanges that work in India which are-
- Bitcoin ATMs
- Mycelium Local Trader
- Bitcoin otc
Current Legal Position of Bitcoin in India
In Union Budget 2018, the Finance Minister reiterated that cryptocurrencies are not recognised as legal tender. In the budget speech, he said that the government does not consider the cryptocurrencies legal tender or coins and will take required measures to eliminate the use of crypto-assets in any type of financing activities which are illegitimate. However, it was said that government will explore about the blockchain technology which drives bitcoins. Following the speech, the Reserve Bank of India directed all banks to not accept any transaction through bitcoins on 6th April 2018.
Several writ petitions are filed against the RBI direction. The central bank has been challenged on two grounds, article 19(1) (g) and article 14 of the Indian constitution. The former “allows citizens to enjoy the right to carry on any occupation, trade, or business,” and the latter “prohibits discrimination and mandates equal protection under the law for all.” The date for the final judgement has been slated to 11th September 2018. So, the position and fate of Bitcoins is unstable in India for now till the final judgement.
By- Tanishka Grover
Student Reporter- INBA