The increasing popularity of Cryptocurrency all over the world demands a strict set of rules regarding their transactions. Read on to know if cryptocurrency is legal in India.
Cryptocurrency has gained a lot of popularity in recent years. These have been used for investment and transactions virtually all over the world. Cryptocurrency works on blockchain technology which provides transparency and authenticity. However multiple countries are trying to understand their working and are still framing rules regarding the trading of cryptocurrencies. In this article, you will read about Is Cryptocurrency Legal in India and other countries as well.
What is Cryptocurrency?
Cryptocurrency is a digital form of currency that uses encryption techniques to regulate the creation and transfer of units. It operates independently from the central banks or other Financial Institutions and allows the users to interact with each other directly and securely. Cryptocurrencies are volatile and some people might view them skeptically because of it but it can offer tremendous opportunities for businesses to increase profits and reduce costs.
One of the main features of cryptocurrency is that it works with unblocks and technology. This technology has revolutionised the way you think about data storage, transaction management, and security. It is decentralised and offers unparalleled immutability and transparency. It has a great impact on banking finance, healthcare supply chain, and other industries. By using innovative Cryptography techniques and smart contracts blocks and technology provides a secure platform for carrying out digital transactions of cryptocurrencies and NFTs. It is secure, safe, and authentic.
Legal Position of Cryptocurrency in India
A legal tender is a medium for exchange used to settle transactions. When a currency is under legal tender status it allows the currency to be used to settle debts. The currencies with legal tender status are backed by the government and are accepted by the government.
When we talk about cryptocurrencies, we know that in India traders virtually transfer cryptocurrencies and use them for transactions and Investments but it does not have a legal tender status. This means that Bitcoin and other cryptocurrencies can not be used to settle debts in exchange for any type of goods or services.
Cryptocurrency is taxed under the category of virtual digital assets. The Indian government knows that virtual digital assets are a part of the international and Indian economy. They cannot be banned but a tax of 30% is charged on cryptocurrencies in India as announced in the union budget 2022. But the taxation of cryptocurrency does not make them completely legal and they still do not have any set of rules about their working. People trading with cryptocurrencies are still waiting for the government to look into this matter and release a bill that has all the rules regarding the transactions and mining of cryptocurrencies in India.
Legal Status of Cryptocurrency in Other Countries
Cryptocurrencies and digital assets are not only new in India but also in other countries as well. Different countries have different sets of rules regarding them while some countries are still trying to figure out how they work and how to regulate them.
Around 131 countries including the United States Of America, the United Kingdom, and other European countries have legalised the status of cryptocurrencies for investment. However, these countries are yet to release a comprehensive set of rules regarding trading. Only two countries have given the status of legal tender to cryptocurrency.
Trading and transactions of cryptography are legal in multiple countries but these cryptocurrencies are restricted from banking uses. Some countries including China, Nepal, and Egypt have completely banned the use and transactions of cryptocurrencies. This includes trading, holding, and investing in these digital assets.
Conclusion
Digital assets including NFTs and Cryptocurrencies are an undeniable part of the Indian as well as International economy. There are multiple transactions done via cryptocurrencies and it is important that the government understands the workings and releases a comprehensive set of laws and rules regarding them. Trading of cryptocurrencies is allowed in India and a tax of 30% is charged on them. However, the status of legal tender is not given to Cryptocurrencies and they cannot be used for banking purposes.
