Introduction
The popularity of cryptocurrency as an appealing investment choice is quickly growing. In the last couple of years, the crypto world is gaining huge fascination among investors. The appropriate laws and regulations can make this possible. A crypto lawyer is playing a crucial role to be aware of the present status of crypto in India. A discussion about whether cryptocurrencies are legal in India has been triggered by Finance Minister Nirmala Sitharaman's new law to tax virtual assets. The government has not yet made it clear whether virtual currencies like crypto may be regarded as legal cash in India, even though many people have applauded the decision to tax digital currencies in the belief that it is the first step toward recognizing them.
The legal scenario of cryptocurrency in India-
Sitharaman stated that consultations on cryptocurrency regulation are now taking place and that once the regulatory draught is finalized, it would be obvious what is legal and what is not. Cryptocurrencies like Bitcoin or Ethereum, according to Finance Secretary TV Somanathan, will never be accepted as legal cash. The finance minister has also suggested that the RBI start issuing Digital Rupee in 2022–2033, using blockchain and other technologies.
According to Somanathan, the RBI, which would never default, will support the digital rupee. "Money will be of the RBI type, but it will be digital. The RBI's digital rupee will be accepted as legal money. The digital rupee can be used to buy non-digital assets in the same way that our wallet can be used to buy ice cream or other items.
The remaining items are not legal tender and never will be. Bitcoin, Ethereum, or any image of an actor that becomes NFT won't ever be accepted as legal tender, he told ANI. Somanathan added that while you may purchase crypto assets just like you can buy gold, diamonds, and other precious metals, their value is determined between two people and is not regulated by the government. Investors in private crypto should be aware that the government does not have approval for it. The finance secretary emphasized that there is no assurance that your investments will be profitable or unsuccessful; you could lose money, and the government is not liable for this. However, the finance secretary made it clear that just because something is not legal doesn't indicate that it is also unlawful. "That is also not unlawful, but I'm not claiming that Bitcoin or Ethereum is. However, I can say that if bitcoin is regulated, it will also not be considered legal tender "Somanathan remarked. When discussing the regulation of cryptocurrencies, the finance secretary noted that while it may seek KYC and seller's licenses, the government will ultimately make that decision after extensive dialogue with stakeholders. He stated that the administration would likewise monitor events in other nations.
The volume and frequency of transactions involving virtual digital assets have multiplied phenomenally, making it necessary to establish a specific tax framework. In light of this, the finance minister proposed the law to stipulate that any revenue resulting from the transfer of any virtual digital asset shall be subject to a 30% tax.
According to a senior government official, a Financial Stability Board report that is anticipated in October would enable the government to decide whether to prohibit cryptocurrency transactions made through wallets and will offer a legal framework for handling crypto commerce in India. The person, who spoke on the condition of anonymity, stated that the study will contain guidance on how the legal parameters of India's cryptocurrency transaction will take shape. The FSB is drafting regulations to regulate cross-border cryptocurrency transactions. To address vulnerabilities and develop and implement strong regulatory, supervisory, and other policies in the interest of financial stability, it was established in 2009 under the auspices of the G20. It brought together national authorities, standard-setting bodies, and international financial institutions. To invest in cryptocurrency in India, you must have a thorough understanding of virtual asset laws and connect with a lawyer who has expertise in scenario base law and regulations associated with cryptocurrencies.
