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Legitimacy Of Cryptocurrencies In India

 A cryptocurrency is a digital asset designed to work as a medium of value transaction. The ownership records are stored in a ledger that exists in a computerized database format. This is designed through strong cryptography to ensure the security of transactions, the creation of additional coins, and verification of coin ownership. In simple terms, we can state that there exists no physical form of currency. Also, there is no centralized agency that regulates currency transfers.

Across the globe, there has been a shift towards a digital economy. According to this, people from different countries use electronic modes of transfer. Following this trend, cryptocurrencies have created their own place specifically to carry out digital transactions. Cryptocurrencies rely on the transfer of digital information from one person to another.

In the last decade, cryptocurrencies have seen an astonishing surge in their values, making people attracted to the crypto market. For example, the value of bitcoin in the early phase of 2010 was 0.0008 USD, which surged to 60,000 USD merely in the time duration of 11 years. This soared value has attracted people from across the globe to invest in cryptocurrencies. This creation of unrealistic profits is not just limited to one form of cryptocurrency. In fact, all Types of Cryptocurrency, including, Etherium, Ripple, Cardano, etc., have grown popular in the world.

Now here comes a question, with so many people entering the market of cryptocurrencies and investing millions of rupees, is Cryptocurrency Legal in India? If yes then, who regulates the affair of such transactions? Through this post, we will try to figure out the rationale behind cryptocurrencies and legislation regulating them.


Appraisal Behind Cryptocurrencies

The cryptocurrency was invented back in 2008 following the Global Economic Crisis. The aim behind this currency invention was the necessity of a decentralized form of currency for every individual. Its need arose because the decisions and policies of government agencies significantly impacted the world's economy. 

The first cryptocurrency emerged out as Bitcoin. It allowed financial transactions in the absence of reliability on banks or governments. Due to its decentralized structure and cryptography, these are securely generated and verified peer-to-peer currencies. It is estimated that these currencies will become a regular mode of transactions in the future.

Unlike the traditional stock markets, the crypto market is also volatile, indicating regular modification in the value of cryptocurrencies. Recently the value of cryptocurrencies observed significant alterations due to the rumours that the government of India will pass some sort of regulations for the crypto market. Due to such a level of vulnerability, people keep themselves away from the cryptocurrency exchange in India.

Regulation Of Crypto Market In India

India is a developing economy; it follows the footsteps of developed economies. Following this similar economic trend, India too has not legitimized the use of virtual currencies similar to other big economies as a regular mode of transactions.

The Indian government has not legitimized it because it is looking out for possible methods through which the regulation of these currencies can be achieved. Currently, due to the decentralized structure of cryptocurrencies, nobody can monitor the transaction, making it difficult to restrict money laundering and other related challenges. In order to monitor such challenges, there is a requirement of centralized regulations, which is why the Indian government is hesitant to legalize these modes of transactions.

In fact, during the last few months, there has been a rumour growing popular that the Indian government will launch its own cryptocurrency in the market. And, it was mentioned that this currency form would be legalized through the passage of a Bill in Parliament. However, till this day, no such law or similar proclamation has been passed by the Parliament. The exact picture of Cryptocurrencies will be available in the upcoming time. Till then, everyone will be in abeyance regarding the use of cryptocurrencies as a mode of transactions.

Related Article:- Reasons for High Demand of Cryptocurrency in India


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