Tuesday, April 24, 2018

Is Bitcoin Illegal in India? (What If Bitcoin Becomes Illegal?)

For anyone looking to buy and sell Bitcoin in India, the first question that comes is if Bitcoin is illegal in India or not?

Also Read: Did RBI Just Banned Bitcoin in India?

If you, too, are pondering over the same question, here is a simple answer to this…

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Is Bitcoin Illegal in India?
Bitcoin is not legal in India. It is NOT ILLEGAL either.

This answer might be confusing, but it really isn’t.

Unlike other countries in the world – like USA, Canada, UK and South Africa – where it is permissible to trade it, Bitcoin is not regulated in India.

There aren’t any laws regarding this cryptocurrency in our country. This qualifies Bitcoin as neither legal nor illegal.

Since like the common saying goes—anything that is not regulated is legal. ;)

So to everyone asking “is Bitcoin illegal in India” – and those going even a step further by asking why is Bitcoin Banned in India – the answers are…

Bitcoin is not illegal, and it is definitely not banned in India!!!

Meaning, you can trade and mine the booming cryptocurrency without the worry of breaking any restrictive law—because you aren’t. (Yayy?)

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Is Bitcoin Legal in India or Not

Understand The Flip Side Though

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Bitcoin Fraud in India
You are free to buy and sell Bitcoin in India—it is not illegal. However, you should be very cautious about your investment. 

This market is unregulated. If you ever take a big loss or somebody cheats you of your money, you won’t be able to contend that in a court of law.

Of course, you can file a case against the offender under Section 421 of the Indian Penal Code and under Section 17 of the Indian Contract Act. But that’s that! Beyond that, there’s nothing more you can do. The case would be like any other fraudulent case, contended in these rather general sections.

This is why it is highly advised that you should choose an Indian Bitcoin Exchange to buy/sell very carefully. Here is a list of 15 popular Bitcoin exchanges in India.

This is why Reserve Bank of India and Finance Ministry of the country has asked the Bitcoin investors to be very cautious.

What Has RBI and Finance Ministry Said on Bitcoin?

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What Finance Minister of India Arun Jaitley Has Said on Bitcoin
On November 30, 2017, Finance Minister Arun Jaitley said, “Recommendations are being worked at. The government's position is clear, we don't recognize this (Bitcoin) as legal currency as of now.

In a notification pushed on 29 December 2017, the Finance Ministry of India said, “there is a real and heightened risk of (an) investment bubble (in virtual currencies) of the type seen in Ponzi schemes which can result in (a) sudden and prolonged crash exposing investors, especially retail consumers, losing their hard-earned money.”

Again on January 2, 2018, FM Arun Jaitley reiterated, “Through multiple notifications, the two parties (the government and the RBI) have notified the public time and again that Bitcoins will not be considered lawful or legal tender in India.

(NOTE: In each of these statements, they said “not legal”. They NEVER said Bitcoin is an illegal tender.)

As for Reserve Bank of India, it made its first statement on Bitcoin back in 2013, saying “No regulatory approvals, registration or authorization is stated to have been obtained by the entities (Bitcoin exchanges) concerned for carrying on such activities.”

On February 1, 2017, in its another statement, RBI said “any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk.”

On December 5, 2017, RBI again pointed out in its statement, “In the wake of a significant spurt in the valuation of many VCs and rapid growth in Initial Coin Offerings (ICOs), RBI reiterates the concerns conveyed in the earlier press releases.”

(Again, RBI never said Bitcoin is illegal!)

Also Read: Arun Jaitley on Bitcoin- What Did He Say About Cryptocurrencies in his Budget 2018 Speech

Will Bitcoin Become Illegal?

Likely NOT! It’s very difficult to ban such a decentralized entity. Just like you can’t ban the internet, making Bitcoin illegal is nearly impossible.

Look at China. Even when the Chinese authorities have ordered for the complete shutdown of Bitcoin exchanges in the country, the people there are still buying and selling Bitcoins through foreign exchanges.

In a beautiful article on Financial Times, writer Gabriel Wildau claims, “Bitcoin proves hard to kill in China”.

It can’t be killed! Bitcoin can’t be made illegal in India.

However, the cryptocurrency will sure be regulated in the coming days. Indian Government has already formed a committee to suggest a framework to regulate Bitcoin, Ethereum, Ripple and other digital currencies.

Rumours are, Bitcoin traders can be charged as much as 30 percent of their return.

What If Bitcoin Becomes Illegal?

What if Bitcoin is made illegal in India – it’s a very legit question!
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What if Bitcoin is made illegal in India?
If ever Bitcoin becomes illegal in India, it doesn’t mean the end of the game for anyone.

The Indian Bitcoin exchanges will be given some time to close their doors. The good and reputed ones will probably give back their users the option to either transfer their Bitcoin to another wallet or to sell their holding and get money.

Now you can sell your Bitcoin and get your money back in your bank account. But if you want to be in this game for longer and make more money, you can easily transfer your Bitcoin to other wallet/exchange, which is based out of India. (Transferring is very easy!)

Connect that foreign wallet/exchange with your PayPal. And resume buying/selling more Bitcoins in no time!

Also Read: How To Buy Bitcoin With PayPal

We always advise people to at least create and verify an account in any foreign exchange beforehand. Because if there ever comes a need when you have to transfer your Bitcoin from an Indian exchange/wallet to a foreign one, you can do that easily and quickly without first waiting for your account to be approved.

Just make an account for free and don’t spend a penny. CEX.io is a nice option. Spectrocoin is just as good that also offers free wallet. Head there and make an account for free. And leave it like that until you need it in the future to transfer your Bitcoins.

That’s it!! That’s how you successfully deal if ever Bitcoin is made illegal in India.

So relax!!! Enjoy trading/investing in Bitcoin. Don’t believe in the rumors.

In the absence of any regulation, Bitcoin is legal in India.

To know more about everything that’s happening with Bitcoin, SUBSCRIBE to Bitcoin India Wiki.

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