India to develop cryptocurrency rules
With the introduction of Bitcoin in 2009, the whole world’s currencies are no longer subjected to commodity or political authority. Bitcoin is basically a currency system based on mathematics. It is not concerned with any type of authority and commodities of the physical world. Thus the prices of Bitcoin are based on pure free market dynamics of demand and supply with the help of independent exchange platform. But there are certain concerns that have been raised thereby declaring Bitcoin to be illegal in the country.
When there was demonetization, Bitcoin was being traded a lot in India due to which people thought that it was mostly being used to launder black money. During the period of cash ban in India, prices of certain asset classes such as gold and real estate literally shot up in the grey market.Along with this, even the jewellers tried to backdate the purchasers by passing off the old notes that were used to buy the asset in the past. Bitcoin is a product and therefore it cannot be used as a currency nor can it be converted to one. Apart from this, it is the responsibility of RBI to take care of such things.
With this situation around it is being stated that Bitcoin is a foreign transaction, a type of trading or barter system. People are using Bitcoin to purchase drugs in college and also a lot of is-sell is being done just to invest in Bitcoin. Due to all these reasons, a small group of experts representing SEBI, Ministry of Economic affairs and RBI are being formed to take care of this. Even though Japan has set certain rules and declared it to be a currency, in India no such rule has been passed and so it has been declared as illegal here. Also according to SEBI if the exchange is official then it will get regulated by them but if not then they automatically turn out to be illegal. Apart from this Enforcement Directorate (ED) will also be approached so as to keep a check on all foreign transactions being taken place in India and through India bank accounts so as to ignore such hassle.
Although Bitcoin is regarded to be a favourable choice for spreading a financial inclusions in a country like India still it cannot take a strong hold in the country until it is leveraged by the Government bodies.