Bitcoin is a cutting-edge payment network built on ground-breaking blockchain technology that has revolutionized the way people send and receive money over the internet. It is gaining momentum in India due to factors such as inherent security, lower transaction fees, lack of banking system intervention, ease of access and use, and universal recognition. Regardless of the legal status of cryptos or digital currencies, individual consumers around the country & across the world are excited about their possibilities & prospects.
Crypto is gradually becoming a mainstream investment class, especially among millennials. Now, purchasing Bitcoin is completely legal in India & there is no law prohibiting Indians from purchasing or selling cryptocurrencies in the country.
India is rumoured to be considering a cryptocurrency ban that would prosecute miners and dealers. A senior government official told Reuters that India will propose legislation banning cryptocurrencies and fining anyone who trades or holds them in the country.
The move is in line with the government’s January-2021 agenda, which called for the prohibition of private virtual currencies like bitcoin while establishing a framework for a national digital currency. Recent government statements, on the other hand, have given investors some trust that the authorities will ease up on the booming market. “All I can say is that we are not shutting our minds; we are exploring ways to conduct research in the digital world and with cryptocurrency,” she told CNBC-TV18. “A very calibrated positioning will be taken in this situation.”- Finance Minister Nirmala Sitharaman
But if the ban is enacted, India will be the first major economy in the world to make cryptocurrency ownership illegal. Possession is not punishable even in China, which has outlawed mining and trading.
The price of bitcoin is constantly fluctuating- while most days it is going up and up, there are days when it is falling rapidly. Even the Financial Conduct Authority issued an alert on 11 January, as the price dropped from $40,000 to $30,000 in less than 24 hours.
In India, the RBI had also issued directives and notices about the possible monetary, operational, customer protection, and legal risks associated with digital currency.
As such transactions are made electronically and are coded, they are vulnerable to illicit and unlawful acts like terror-funding, theft, organized crime, and other money-laundering Acts easily.
After conducting due diligence on the project, one can invest based on risk appetite & considering market volatility. It is advisable to use reputable crypto exchanges that adhere to KYC and AML regulations only. As in every other industry, be wary of get-rich-quick schemes or people who promise to double your money, these factors must be taken into consideration with caution.
According to a market survey, investors aged between 25 to 40 in India are heavily investing in bitcoin.
The future of cryptocurrency is still very much up in the air. Critics see nothing but danger, while supporters see nothing but infinite opportunity. Is there a promising future for cryptocurrencies in India? According to experts, there are several issues to address, ranging from regulatory ambiguity to financial literacy and redress mechanisms to streamline things.
Cryptocurrencies, like gold, are used as a hedge to secure fiat assets & holdings, and their importance as a hedge is based on their ability to beat inflation. It can be used to purchase products and services, but it is mostly used as a store of value for most people around the world. It is used as an investment tool in the same way that stocks, bonds, and other financial instruments are.
It offers a good scope in respect to transactions as bitcoins can be used anywhere in the world because they are digital & considered “globally recognized.” Many major and reputed corporations, including Microsoft, Twitch, Starbucks, and others, have already begun to recognize bitcoins as a legal mode of payment.
The majority of research in the last 3–4 years has been about the use case of blockchain technology effectively, which has been mostly in the realm of cryptocurrencies, and it’s exciting to see the degree of creativity, this space is experiencing. We must not forget that at its base, blockchain technology is allowing new avenues & introducing a new viewpoint of confidence between intermediaries, which is the technology’s crux.”
Bitcoin has not only set the bar for cryptocurrencies by ushering in a surge of decentralized peer-to-peer networks, but it has also become the de facto norm for cryptocurrencies.