Bitcoin mining did not get a legal status in India yet. First of all, we need to understand what is bitcoin mining. It is the process by which transactions are verified and added to the public ledger, which is also known as the blockchain, and it is the means through which new bitcoins are released. It is an online process with internet and suitable hardware. The process involves a special software to solve certain puzzles which are computionalizedly difficult, on solving such problems certain number of bitcoins are issued.
The bitcoin in a very short span of time experienced a lot of ups and down. The craze for this currency raised so high that investors hardly took a step away from trading in other cryptocurrencies. Though the regulatory authorities repeatedly said that this is just a bubble phase, but anyway bitcoin made its way. Many countries like Canada, Australia and European Unions legalized bitcoins, but India is not ready to legalize it
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Bitcoin mining did not get a legal status in India yet. First of all, we need to understand what is bitcoin mining. It is the process by which transactions are verified and added to the public ledger, which is also known as the blockchain, and it is the means through which new bitcoins are released. It is an online process with internet and suitable hardware. The process involves a special software to solve certain puzzles which are computionalizedly difficult, on solving such problems certain number of bitcoins are issued.
The bitcoin in a very short span of time experienced a lot of ups and down. The craze for this currency raised so high that investors hardly took a step away from trading in other cryptocurrencies. Though the regulatory authorities repeatedly said that this is just a bubble phase, but anyway bitcoin made its way. Many countries like Canada, Australia and European Unions legalized bitcoins, but India is not ready to legalize it.
On 1st February 2018, while announcing the Union budget 2018-19, Finance minister Arun Jaitley stated that the government is going to take all possible measures to eliminate the use of crypto-assets in financing illegitimate activities, and will also explore the use of blockchain technology for ushering in the digital economy. On April 5th, the Reserve Bank of India issued a statement banning the banks in the country from dealing with cryptocurrency exchanges and other similar services. It is believed that This step of RBI is just taken for the sake of protecting the people and companies from the risks associated with such volatile assets.
The interesting part is that the Reserve Bank has neither declared bitcoin as illegal not it said that it shall be accepted as currency. The apex bank just highlighted the risks involved in the virtual currency. The currency as defined under Sec. 2(h) of the Foreign Exchange Management Act 1999, the bitcoin does not fit into it. Currency includes all currency notes , postal notes, postal orders, money orders, cheques, drafts, travellers cheques, letters of credit, bill of exchange and promissory notes, credit cards or such similar instruments. Sec. 2(a) of the Coinage Act 2011 says that coin in the form of meal or any other material stamped by government or any other authority empowered by the government in this behalf, and it does not include credit card, debit card, postal order and e-money issued by any bank, post office or financial institution. Thus bitcoin is not a coin as well
