The Future of Cryptocurrency in India (2024)

FAQs

What is the future of cryptocurrency in India? ›

Crypto and its scope in India

There will also be a Tax Deduction at Source (TDS) of 1% for transactions greater than Rs. 50,000. Investments in crypto assets have also gained great momentum. According to Tracxn, in 2021, there were over 48 fundraising rounds with a total investment of $638 million.

But India blocked access to foreign cryptocurrency exchanges like Binance, Kucoin, OKX, and virtual digital asset service providers in January. This came after an input from the finance ministry's Financial Intelligence Unit (FIU) which suggested that these platforms may have been used for money laundering.

Cryptocurrency is a safe investment or not? Like any other investment, cryptocurrency is not a risk-free investment. The market risks, cybersecurity risks and regulatory risks, as cryptocurrency is not issued or regulated by any central government authority in India.

They are unregulated but according to the recent Union Budget 2022, the government of India announced a 30% tax on gains from cryptocurrencies and a 1% tax deducted at source.

Investing in cryptocurrency in India involves significant risk due to regulatory uncertainties, but it is not illegal. Currently, top cryptocurrencies for investment include Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB). Always conduct thorough research and consider diversifying your investments.

Cryptocurrency trading and investment are legal in India, but the regulatory framework is still evolving. In 2018, the Reserve Bank of India (RBI) issued a circular that prohibited banks and other regulated entities from providing services to businesses dealing with virtual currencies.

India to Ban URLs of Certain Crypto Exchanges

On Dec. 28, 2023, the Financial Intelligence Unit (FIU) sent a show cause notice to nine offshore crypto exchanges after they were found to be “illegally operating” and not in compliance with India's anti-money laundering law.

Industry experts attribute a wide number of factors to this, including apprehension among retail investors triggered by a lack of regulatory clarity, India's crypto taxation policy, and statements against the cryptocurrency sector by senior government officials.

First off, owning and trading Bitcoin (and other cryptocurrencies) is legal in India. The Reserve Bank of India (RBI) classifies cryptocurrencies as "virtual digital assets" (VDAs). This indicates recognition for tax purposes, but they are not considered legal tender.

Crypto currency mining is not so lucrative in india as Indian government is not so friendly in terms of taxation and regulations in crypto industry. The upcoming bitcoin halving also will impact the miners as it will reduce the bitcoin reward for each block mined.

What are the challenges of cryptocurrency in India? ›

Cryptocurrency in India offers financial inclusion, protection against inflation, remittance benefits, new investment avenues, fast transactions, and decentralization. However, it faces regulatory challenges, volatility, fraud risk, power consumption, and impact on traditional banking.

We've seen early signs of recovery so far, with Indian exchanges reporting a surge in volumes for the month of January. However, nearly $4 billion in crypto assets of Indian investors are believed to be parked in foreign wallets, of which only a few millions have come back.

In 2021, the government prepared a bill that would have banned private cryptocurrencies though it has not been introduced. Last year, when it was president of the G20, India called for a global framework to regulate such assets.

1. Supreme Court Ruling (2020): The Supreme Court of India lifted the Reserve Bank of India's (RBI) ban on cryptocurrency transactions. The RBI had initially imposed restrictions that prevented banks and financial institutions from providing services related to cryptocurrencies.

Key Takeaways. Bitcoin, the cryptocurrency, is most likely to remain popular with speculators over the next decade. Bitcoin, the blockchain, will probably continue to be developed to address long-standing issues like scalability and security.

Analysts estimate that the global cryptocurrency market will more than triple by 2030. This all leads to one big trend. Cryptocurrency, once only understood among a relatively fringe community of anti-establishment investors, is now becoming a household name – and quickly.