Tag Archives: VC

ILN Today Post

Future of Virtual Currencies in India

The legal status of virtual currencies (“VCs”) such as Bitcoins continues to be debated as it remains unrecognized in India.

The Reserve Bank of India (“RBI”) in the past had issued several advisories clarifying that creation, trading or usage of VCs, as a medium for payment are not authorized by any central bank or monetary authority in India and entails various risks, but RBI stopped short of declaring VCs as illegal. However, pursuant to issuance of these advisories, the Enforcement Directorate did reportedly conduct raids against operators of trading platforms of VCs in India, creating an atmosphere of regulatory uncertainty for the VC industry. In absence of any clear direction or regulation by the Government, the matter of VCs seems to have remained in an uncertain limbo riddled with regulatory pitfalls.  

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ILN Today Post

Legal status of virtual currencies/cryptocurrencies in India

  1. INTRODUCTION. 

1.1.         Unlike the traditional form of currencies issued by government/banking authorities, virtual currencies (“VCs”) such as Bitcoin are a form of cryptocurrency/digital currency, ‘issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community1, and which relies on cryptography for its creation and management.

1.2.         In this digital age, trading and transacting in VCs such as Bitcoins has reached an alarming proportion and the question of recognition and regulation of VCs is therefore a question that governments have been grappling with over the last few years. India is no different, and this newsletter is an attempt to provide a brief overview of the legal status of VCs in India. 

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