“Investing in crypto has always been 100% legal in India and the new RBI circular clearly confirms the right to do business with crypto firms,” said Avinash Shekhar, co-Chief Executive Officer at ZebPay, India’s oldest crypto exchange. He added that the clarification will attract more investors to the virtual currencies. Crypto in India is currently booming, the market has been thriving, and retail investors are adding to the fire with their enthusiasm. India has been estimated to have over 10M + crypto investors, and this number is snowballing every day.
While a significant number of Indians are wholeheartedly affirming crypto currencies, one piece of misinformation is holding back many more millions. People confuse the unregulated aspect of crypto currencies with being illegal.
Crypto currencies are not illegal; anybody can buy, sell and trade crypto currencies. It’s unregulated; we do not have a regulatory framework to govern its functioning for now.
When crypto currencies started to blow up in India in 2017, tech-savvy retail investors were relishing them. But there were also folks who were taking undue advantage of it and were fuelling illicit activities.
Since at the time, crypto currencies were in a very nascent stage, and the regulators were yet to decipher their adoption. To curb the rise in illicit activities, the government took measures that they thought were best at the time.
In 2018, The Finance Ministry released a statement saying:
“ The Government does not consider Crypto currencies “as Legal Tender or Coin” and will take all measures to eliminate the use of these Crypto Assets in Financing “Illegitimate Activities” or a Part of the Payment System The Government will explore the use of Blockchain technology proactively for assuring in Digital Economy.”
The above statement from the Finance Minister was followed by a circular from RBI. It suggested all entities governed by them stop offering any kind of service to entities associated with virtual currencies.
The government was never against the technology; they intended to prevent the wrong usage of crypto currencies and blockchain.
In the statement released by the Finance Ministry, it nowhere said that buying, selling or holding crypto currencies were prohibited. They said that they are taking measures to eradicate the use of crypto in financing illegal activities: a great step towards a healthy crypto ecosystem.