Decoding the Cryptocurrency ban in India

Bill Gates, the co-founder of Microsoft, an investor, and a great philanthropist, once said that “Bitcoin is a technological tour de force,” and the rest is history.

 

Cryptocurrency ban in India

How did Cryptocurrency start?

Many of you would now have this rational thought running through your mind about using any form of Cryptocurrency in a society where people are still very convenient using the tangible form of currency, be it a coin or a currency note. Going cashless is also a digitalization in this era of digital platforms, social media, and brand new gadgets. Lately, you would find most of the urban population and a small percentage of the rural population switching to digital modes of payment because they are fast, safe, and secure. So, why not go digital or cashless?

In the late 90’s tech boom, many multinational companies (MNC’s) and other small merchants wanted to develop a parallel line of currency that would be out of any central authority’s hold or reach. Ironically, the companies that conceived a digital currency assumed central control, which led to many financial frauds and losses. Hence digital currencies became a lost cause until, in 2009, Mr Satoshi Nakamoto and a group of other programmers introduced the world to the first-ever Cryptocurrency, the “Bitcoin.”

What is Bitcoin?

Bitcoin is the most sought-after Cryptocurrency in the world. It was initially bought to use in the year 2009. It uses the “peer-to-peer” technology with no central authority or banks to maintain and control the transactions. Bitcoin serves three primary and exciting purposes, such as: 

  1. Fast peer-to-peer transactions without any central authority.
  2. Low processing fees, which makes it even more popular and widely used.
  3. The concept of worldwide payments.

Bitcoin is an open-source design that is entirely public, wherein the transactions and the issue of the coins are done collectively by the network. These are a few reasons which make Bitcoin the most important and widely used Cryptocurrency across the globe. The open-source and public management of transactions is also why millions of people prefer Bitcoins or any other cryptocurrencies as a mode of payment.

 

Read Tech companies paying in Cryptocurrency 

Start of Cryptocurrency in India

The first-ever sale of an item using Bitcoin in India took place in 2010 when a customer swapped 10000 bitcoins for two pizzas. The following year numerous other cryptocurrencies like Swiftcoin and Namecoin. As we advance in the next six years, cryptocurrencies experienced a surge in their value, Bitcoin being the widely used one. Bitcoin saw a spike from $5 at the start of 2012 to a gasping $1000 in its price by the end of 2017. These six years saw the expansion and the best use of cryptocurrencies in India. It happened with the birth of many cryptocurrency exchange applications like Zebpay, Coinsecure, and Pocketbits.

Is there any cryptocurrency ban in India?

Why cryptocurrency ban in India?

The next question that stops by in our minds would be about the legality and the use of cryptocurrencies. Cryptocurrencies were all legal and were full-fledged use until December 24th, 2013. During their press release, the Reserve Bank of India(RBI) stated that a central bank did not back cryptocurrencies and that any asset didn’t underpin their value. The issue was under speculation. 

Five years down the line, the RBI issues a circular preventing commercial and co-operative banks, small payment banks, and payment system providers from dealing in virtual currency and providing service to all entities which deal with them. This bill saw all the crypto exchanges unable to access Indian bank servers crippling their business overnight. As the lightest ray of hope on March 4th, 2020, the supreme court cut down all RBI’S cryptocurrency ban in India, bringing back a decaying crypto market to life.

The court overturned the bill because Cryptocurrency is unregulated but not illegal in the country.

Hence, to this date, various cryptocurrencies still exist in the country and are not banned. Yes, the usage of digital currencies has reduced in the country due to various reasons, and also the future of the use of them is also very uncertain and vague. 

As of January 9th, 2021, the government has stated that it will soon pass a bill to develop a sovereign and common Cryptocurrency for the nation, eventually banning all the private forms of digital currencies.

Government new bill on Cryptocurrency

According to a survey, the Cryptocurrency ban in India is not valid, as the government is planning to arrange a panel of experts to look into the possibility of regulating it. Previously, the government planned to introduce legislation banning all types of decentralized cryptocurrencies in the nation.

According to the Economic Times, a panel of experts is likely to research the topic and decide if controlling cryptocurrencies is a safer choice than outright banning them, citing three sources familiar with the new debate.

Several cryptocurrency exchanges in the country have urged the government to control rather than outright prohibit virtual currencies. In the past, the government has hinted that a complete ban on cryptocurrencies might not be essential.

How do people of India buy Cryptocurrency in India after RBI ban?

Though Cryptocurrency is currently not banned in India. But in case it gets banned, then some exchanges allow you to trade in Cryptocurrency in India.

Here are some exchanges:

Local Bitcoins

Local Bitcoins is a bitcoin start-up in Finland that enables the over-the-counter exchange of local currency for bitcoins. It is a peer-to-peer trading platform that accepts all payment methods and allows people worldwide to buy bitcoin in their currency. This company operates in every major city in India, including New Delhi, Hyderabad, Kolkata, Ahmedabad, Surat, Chennai, Chandigarh, Pune, Guwahati, etc.

Wazirx

WazirX, another peer-to-peer trading site, is on its way to becoming India’s most reputable bitcoin exchange. You can purchase, trade, and sell Bitcoin, Litecoin, Ripple, Ethereum, and various other cryptocurrencies on the exchange in India. This exchange also has its native token, WRX. And the exchange is KYC-based, has Android and iOS smartphone applications, and claims to process hundreds of transactions per second.

Instashift

InstaShift is an over-the-counter cryptocurrency exchange . This allows users to buy and sell Cryptocurrency in a novel multi-party p2p model. The exchange will enable users to sell Cryptocurrency in escrow and needs all buyers to have a wallet, which should not be an issue for crypto enthusiasts. Users may also obtain money directly through their bank accounts as well as Cryptocurrency into their InstaShift accounts.

Conclusion- Cryptocurrency ban in India

It brings us to the conclusion that any form of Cryptocurrency is not illegal in India. And anybody can buy, trade, and sell cryptocurrencies in any part of the country. We keep in mind that it is unregulated and a collectively maintained public ledger where anyone can see everyone’s transactions.

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