February 21st, 2018
There was a recent spike in Bitcoin’s value, and it was successful enough in attracting the attention of many investors.
But there is still a lot of confusion surrounding the cryptocurrency ecosystem in India. The Narendra Modi Indian Government and Reserve Bank of India have made it sufficiently clear that they aren’t very comfortable with virtual currencies.
The Sudden Rise in Bitcoin’s Price
The price of Bitcoin has been rising continuously for a long time now. The price of this digital currency has surged rapidly, exceeding different thresholds. The price of Bitcoin surged past $5,000, $10,000 and then $17,000.
The Bitcoin currency system comes with tremendous potential, considering how many investors around the world are showing interest. Notwithstanding the warnings on the future of Bitcoin and its legitimacy, cryptocurrency traders from around the world have been soaking in Bitcoin Euphoria. However, Indian regulators starting from the Finance Minister to the Reserve Bank of India have been cautious in apprising Bitcoin enthusiasts of the perils, although these announcements made by the concerned authorities don’t make virtual currencies or its trading illegal.
So the present status is – Bitcoin is neither legal nor illegal in India.
No man’s land
On November 2017 the rising price of Bitcoin grabbed the attention of many investors from around the country. The finance minister said the country doesn’t recognize Bitcoin as legal tender and it started creating lots of confusion. After a month, the government again cautioned people against the perils of investing in Bitcoin. Government and concerned authorities issued warnings that Bitcoin is similar to fraudulent schemes and it has no legal status. The government also went on to say that consumers should be extremely cautious and avoid getting trapped in such schemes. Despite all that, many Bitcoin enthusiasts started showing faith in this digital currency, and it’s gained a huge amount of popularity in the country.
Again, on January 2nd, Arun Jaitley the the Finance Minister of the country reiterated the Government’s position in the Parliament, saying enthusiasts were betting money at their own risk. Through numerous notifications, the Reserve Bank of India and the Government notified common people time and again about Bitcoin risks. Bitcoin is not considered to be legal tender or lawful in India. However, this doesn’t mean that Bitcoin is illegal in this country, and its for this reason many enthusiasts are putting money into this digital currency.
What are legal experts saying?
Legal experts from around the world say Bitcoin not being legal tender doesn’t mean it is illegal. The difference here is that if Bitcoin is legal tender it is recognized in the country as currency, and it can be freely used for all kinds of settlements and payments. On the other hand, if Bitcoin is not legal tender, it means Bitcoin may not be accepted as payment for financial transactions – for example, a share or a gold certificate. These are not considered legal tenders, but many people around the world accept them as they are still valuable.
Currently, there are no such regulations of these cryptocurrencies. By emphasizing that Bitcoin is not legal, and also not declaring them illegal, the government has put Bitcoin in the grey zone. The government has kept Bitcoin’s legal status unclear to discourage enthusiasts or common people from investing in this new currency. Everyone knows cryptocurrency is a very high-risk asset, and every investor should be aware of its perils at the start.
What are Bitcoin Trading firms saying?
Bitcoin trading exchanges in this part of the globe are uncertain right now. Many people are worried about what will happen to their money. Some are of the belief that government will introduce some laws or norms to regulate this new currency system shortly. Such delay in clarity is deterring many people from investing and trading in Bitcoin or other similar currencies. However, there are some firms that are not too perturbed with such statements or notifications.
The government constituted a committee which will suggest a framework for regulating these virtual currencies. The committee will also try to understand the legal implications and current structure of Bitcoin. Until then, the whole thing is in a bit of haze. Be careful if you are eager to invest in Bitcoins.