LATEST BITCOIN NEWS

BITCOIN IS  OFFICIAL CURRENCY OF CAR   , PANAMA   PERMITS USE OF CRYPTOCURRENCIES
Dated   30.04.2022  :   The parliament of  Central African  Republic ( CAR ) passed  a  bill making Bitcoin as  its   official currency . CAR is the second country to adopt Bitcoins after  El Salvador   adopted Bitcoins as official currency in  2021 . Reuters News Agency has reported that the bill was unanimously passed by the parliament  . 

  In another   news ,  Reuter  reported " Panama's National Assembly approved a bill to regulate the use and commercialization of crypto assets in the Central American country renowned as a hub of offshore financial services.  "   Now citizens of Panama can use cryptocurrencies for    making  civil and commercial payments , 

India acts tough  on Cryptocurrency Income tax 

Dated 26.03.2022 : Indian parliament passed  Finance bill 2022     incorporating various amendments  to the existing tax laws as  well introducing new tax laws for the financial year  2022-23   which  will begin on April1st , 2022   .   The proposals   to amend laws and new laws were  presented to the parliament  on 1st, February 2022  by  The Finance Minister Ms Nirmala Sitharaman .  

In the budget speech on 01.02.2022  , Indian Finance Minister  Ms Nirmala Sitharaman  announced that India  is going to   TAX   INCOME FROM THE CRYPTOCURRENCIES AT   A FLAT RATE OF 30 % .  No deduction is allowed   except the cost of acquisition . Further TDS of 1 % will be collected   on the amount of transaction in virtual currencies .   Receiver of gifts  of virtual currency  will be taxed 
The Finance  bill 2022  passed by the  Indian  parliament  yesterday    and new section  115bbh has been introduced  in the Income tax act incorporating   taxes  on cryptocurrency  .  The new  inclusion clause  is tougher  than thought of before as it will not allow  any deduction in respect of any expenditure (other than cost of acquisition) nor allow set off of any loss from transfer of the virtual digital asset  against income computed under any other  provision of this Act to the assessee . Further such loss shall   not be allowed to be carried forward to succeeding  assessment years  also   . Now  it is  clarified that     the loss   made    in a trade in  one cryptocurrency cannot be set off against the profit made  in other   cryptocurrency trade  , in  a written clarification  issued  by  Union Minister of State for Finance Pankaj Chaudhary in the Loksabha . 
 The legality   of cryptocurrency trade  is not yet spelt out  by the government  and the government has brought tough tax laws   making its trade    less attractive to traders and investors   . 

In spite   of  such   adverse  investments climate  for cryptocurrency business   in India  , it is guessed that  more than 20 million Indians have  invested   in  such risky  accounts   . We have to see  what will happen to the Indian market in coming months with the  introduction of new law . 

NO SET OFF OR CARRY FORWARD  ALLOWED FOR CRYPTOCURRENCY LOSSES   : 

Dated 24.03.2022   :   Further to FM' s announcement   of  taxing cryptocurrency income  from April 2022  .  Government of India has added  a  new section 115BBH in the income tax act   in the Finance Bill 2022  introduced in the parliament  of India  . 

​ As per the new section  115BBH ,   Tax  on cryptocurrency   will be 30 %   of  cryptocurrency  income , as announced in the Budget speech .  But      you cannot set off nor carry forward    any loss incurred in a  cryptocurrency trade or any other  business as per the new  section .   Further it is now clarified that     the loss   made    in a trade in  one cryptocurrency cannot be set off against the profit made  in other   cryptocurrency trade  , in  a written clarification  issued  by  Union Minister of State for Finance Pankaj Chaudhary in the Loksabha . 

The new  section 115BBH  , as  introduced in the Finance Bill 2022 ,  says 

"
(1) Where the total income of an assessee   includes any income from the transfer of any virtual digital asset, the income-tax payable shall be the aggregate of––
(a) the amount of income-tax calculated on the income  from transfer of such virtual digital asset at the rate of 30% .; and
(b) the amount of income-tax with which the assessee would have been chargeable, had the total income of the  assessee been reduced by the income referred to in clause (a).
(2) Notwithstanding anything contained in any other  provision of this Act,––
(a) no deduction in respect of any expenditure (other than cost of acquisition) or allowance or set off of any loss shall be allowed to the assessee under any provision of  this Act in computing the income referred to in clause (a)  of sub-section (1); and

(b) no set off of loss from transfer of the virtual digital asset computed under clause (a) of sub-section (1) shall  be allowed against income computed under any other  provision of this Act to the assessee and such loss shall   not be allowed to be carried forward to succeeding
assessment years.    " 

Editor's Note :  Government of  India has decided  to tax  cryptocurrency transactions and income  . FM Ms Nirmala Sitharaman  says   taxing  is not same as legalizing and  it is yet to be finalized . She also says   that both Government and RBI are  discussing   the matter and both   are   said   be  with  the same opinion on  cryptocurrencies    . Now RBI Deputy Governor says  that they can be neither  regulated nor controlled . Hence he bats for  banning of cryptocurrencies   .  We have to keep fingers crossed   to know what finally  our regulators decide . 

BANNING OF CRYPTOCURRENCIES  IS ADVISABLE  :  DG OF RBI 

Dated 15.02.2022 :  Shri T Rabi Sankar, Deputy Governor, Reserve Bank of India  , has  advised ,in  a  Keynote address delivered  yesterday at the Indian Banks Association 17th Annual Banking Technology Conference and Awards , that banning cryptocurrency is perhaps the most advisable choice open to India.  He argued that  crypto-technology is underpinned by a philosophy to evade Government controls.  As Cryptocurrencies have specifically been developed to bypass the regulated financial system., it  should be reason enough to treat them with caution.  He continued  " We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi Schemes, and may even be worse. These should be reason enough to keep them away from the formal financial system. Additionally, they undermine financial integrity, especially the KYC regime and AML/CFT regulations and at least potentially facilitate anti-social activities. More substantially, they can (and if allowed most likely will) wreck the currency system, the monetary authority, the banking system, and in general Government’s ability to control the economy. They threaten the financial sovereignty of a country and make it susceptible to strategic manipulation by private corporates creating these currencies or Governments that control them"   In view  of these arguments , he  concluded  that banning cryptocurrency was  perhaps the most advisable choice open to India. 

 In   his  speech , he touched   some of the issues relating  to  cryptocurrencies and elaborated  on the various aspects of cryptocurrencies  of cryptocurrencies  as below   : 

Characteristics of Cryptocurrencies  : 

1. cryptocurrencies are decentralized systems where transactions are authenticated by participants themselves by consensus. They are designed to bypass the financial system and all its controls. They cannot be traced or confiscated or frozen by Governments.

2. They are anonymous – transactions are verified, but not the purposes or counterparties of transactions.

3. They are borderless – that is, they work over the internet without any physical existence.    

  RBI DG 's  arguments    against  cryptocurrency?

1. A cryptocurrency is designed to be a currency, but does it really function like a currency as we understand it. Firstly, currency always has an issuer, usually a trusted entity like the sovereign. Even when gold is used as a currency, the gold coins had to be issued by a sovereign entity. Secondly, historically, a currency has always been either a commodity with intrinsic value or a debt instrument. Cryptocurrencies do not conform to this understanding of a currency as they do not have an issuer, they are not an instrument of debt, or commodities nor do they have any intrinsic value. Currency needs trust, not everything that can be trusted is a currency. So even if technology (as in a blockchain) provides the trust for cryptocurrencies, they can at best perform the role of a currency within the private and closed environment of that cryptocurrency. They do not, and should not, automatically become a currency for the larger society.

2. Some countries tend to treat cryptocurrencies as a financial asset. This is also problematic because all financial assets have underlying cash flows and need to be some person’s liability. Cryptocurrencies are neither any person’s liability nor do they have any underlying cash flows. They are not financial assets, by definition.

3.  There is also an effort to treat cryptocurrencies as a commodity. But commodities are tangible and have utility; cryptocurrencies have neither

4.Cryptocurrencies are very much like a speculative or gambling contract working like a Ponzi scheme. 

5. The volatility of many cryptocurrencies precludes them as an efficient medium of exchange. Besides, a priori there is no ground to believe that people place the same trust in them as they do in legal tender currencies.  

RISKS  POSED TO SOCIETY  BY ADVENT  OF CRYPTOCURRENCIES : 


 Shri T Rabi Sankar, Deputy Governor, Reserve Bank of India further dwells on the   risks involved  in using the cryptocurrencies    as follows : 

1. The fundamental risks of cryptocurrencies are two - they are intended to be private currencies and they are structured to evade Government control with respect to financial integrity standards such as KYC, AML/CFT etc. Let us examine each of these two points in a little more detail.

2.   GOVERNMENTS LOSE  ABILITY TO CONTROL THE ECONOMY   : Historically, private currencies have resulted in instability and therefore have evolved into fiat currencies over centuries. The retrograde step back to private currencies cannot be taken simply because technology allows it (it always did, actually) without any consideration for the dislocation it causes to the legal, social and economic fabric of society. Every private currency will eventually replace the Rupee to some extent. Consequently, the role of the Rupee as a currency will be undermined. With one or more private currencies being allowed, there would be parallel currency system(s) in the country. Thus, increased acceptance of cryptocurrencies would result in effective ‘Dollarization’ of our economy. Dollarization, it is well understood, would undermine the ability of authorities to control money supply or interest rates, as monetary policy would not have any impact on the non-Rupee currencies or payment instruments. When that happens, India loses not just its currency, a defining feature of its sovereignty, but its policy control of the economy. With loss of traction for monetary policy, the ability to control inflation would be materially weakened.

3. RISK TO  FINANCIAL STABILITY : Given a choice, people may like to hold at least a part of their deposits in convertible currencies like the US Dollar or Euro. Cryptocurrencies priced in these convertible currencies would provide such an opportunity. If private currencies are permitted, the banking system’s ability to mobilise deposits in Rupees, and consequently, the ability to create credit, would diminished. Credit creation in convertible currencies would be impervious to monetary policy. In the extreme case where a major part of deposits and credit shift to cryptocurrencies, the result would be a weakened, even crumbling, banking system, impairing financial stability.

4.  RISK TO CAPITAL MARKET  : There are already indications that private cross-border flows are taking place in cryptocurrencies. If this trend is legitimised, a part of the flows related to trade payments, personal remittances or cross border investments would be made in these cryptocurrencies. As they are non-reserve currencies, this could have adverse implications for India’s foreign exchange reserves, which lend stability to the external sector. Besides, such cryptocurrency payments can take place outside the ambit of capital account regulations. This would adversely affect the integrity of the capital account regime, as policy control on capital flows would be eroded. The consequence of this on foreign exchange reserve accretion and exchange rate management raises serious macroeconomic stability issues.

5. It is important to appreciate that the concern with private currencies is not limited to bitcoin or just cryptocurrencies. The concern extends to any private currency, whether digital or physical, whether crypto-based or not. Stablecoins (which are simply cryptocurrencies that are less volatile) are being promoted globally, presumably because they are more stable than, say, bitcoin. We should in fact be more concerned about stablecoins because they would be more effective as currency than volatile cryptocurrencies. 

6.  ATTRACT   ILLEGITAMATE TRANSACTIONS : The very raison d’etre of cryptocurrencies is that they bypass established intermediation and control arrangements  that ensure integrity of financial transactions, such as Know-Your-Customer regimes, Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) rules etc. The fact that they are anonymous, decentralized systems that operate purely virtually makes cryptocurrencies particularly attractive to illegal/illegitimate transactions which have been largely filtered out of the formal financial system  

Should Cryptocurrencies to be controlled and Regulated ?   

 The basic arguments being made for regulating cryptocurrencies are as follows:

Blockchain or Distributed Ledger Technology is a promising technology where Indians might have a global edge. Banning cryptocurrencies would affect the absorption of DLT technology in India.  Most major countries are not banning cryptocurrencies, but are considering some kind of regulation.  Many Indians have already invested in cryptocurrencies and banning it may lead to wealth loss for them. Banning in any case is unlikely to be effective because by its very nature cryptocurrencies can be acquired and traded in an anonymous manner.

However DG  Mr Rabi Sankar  dismisses  the argument put  forward by the proponents and comes to conclusion that  it can neither be regulated by any financial sector regulator   nor It is  possible to regulate something that one cannot define.  

In light of the reasons he puts forawrd  , he concludes that  the Best option for India  is to ban them . 

To  read  the complete speech of T . Rabi sankar ,  CLICK HERE

Are cryptocurrencies legal in India now ? 

Dated 11.02.2022 :   RBI had in 2018   prohibited  all the entities like Banks , NBFCs , Payment Banks , wallets regulated by them  to  deal with or provide any service related to transactions involving Bitcoins and other cryptocurrencies .   In March 2020  ,  the Supreme court of India   , disposing of a writ petition filed by   Internet and Mobile Association of India   had   lifted the ban imposed by Reserve Bank  of  India  in 2018 on  Bitcoin and other cryptocurrency Trading in India .  No guidelines had been issued by RBI after Supreme Court decision , though the statements of present Governor of  RBI weighs heavily against  allowing cryptocurrencies   .  Many central banks around the world have taken similar stands  , as they think monetary system is  their exclusive domain . 

 In December 2021   ,  Government of India wanted  to bring a bill in the   parliament  proposing  a  bill to ban / regulate  cryptocurrencies  .  . But the proposed bill was  not placed   for  the consideration of loksabha in the last winter session . 

Now  in the  present budget proposed by the Finance Minister for FY 2022-23   ,  FM has proposed to tax    on cryptocurrency income at 30 %   and a  TDS at 1 %  on cryptocurrency transactions .  But still  the government has not come out with a  policy / law clarifying the legal status of the  cryptocurrencies  . In one  of the  TV interviews post budget , FM stated  that the legality  issue will be  taken later  and taxing cryptocurrencies is a  different  issue . 

Whether taxing of income and   transactions indicates the tacit approval of the government ? Whether it is one step forward   toward recognizing   the cryptocurrencies ?   Government is not clear and FM has told    that just discussion on illegalizing is still go on . 

​We have  to wait how the issue will be taken further by RBI and the Government of India 

VIRTUAL CURRENCY TAX : 

In the budget speech on 01.02.2022  , Indian Finance Minister  Ms Nirmala Sitharaman  announced that India  is going to   TAX   INCOME FROM THE CRYPTOCURRENCIES AT   A FLAT RATE OF 30 % .  No deduction is allowed   except the cost of acquisition . Further TDS of 1 % will be collected   on the amount of transaction in virtual currencies .   Receiver of gifts  of virtual currency  will be taxed  . 

She told  "  ​I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent.  No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition. Further, loss from transfer of virtual digital asset cannot be set off against any other income.  Further, in order to capture the transaction details, I also propose to provide for TDS on payment made in relation to transfer of virtual digital asset at the rate of 1 per cent of such consideration above a monetary threshold.  Gift of virtual digital asset is also proposed to be taxed in the hands of the recipient  " 

DRAFT BILL TO BAN CRYPTOCURRENCIES IN INDIA 

Dated 25.11.2201 :    Government of India is  tabling  a  bill  which prohibits  all activities related  to cryptocurrencies in the territory   of India   for the  approval of Parliament   during this winter session . 

As per the draft  bill ,  No person shall mine, generate, hold, sell, deal in, issue, transfer, dispose of or use Cryptocurrency in  the territory of India. The draft Bill bans the use of cryptocurrency as legal tender or currency. Mining is an activity aimed at creating a cryptocurrency and/or validating cryptocurrency transactions between a buyer and seller. 

Under the proposed law   , contravention  is punishable with a fine or imprisonment of up to 10 years, or both.   Further  issuing any advertisement, soliciting, assisting or inducing participation in use of cryptocurrency is punishable with a fine or imprisonment of up to seven years, or both. Acquiring, storing or disposing of cryptocurrency with the intent of using it for non-commercial purposes will be punishable with a fine.   

Further India Government may  ,  in consultation with the central board of the RBI, approve digital rupee to be legal tender.  The RBI may also notify a foreign digital currency as a foreign currency.  Foreign digital currency means a digital currency recognised as legal tender in a foreign jurisdiction.

 It is estimated that more than 10 crore  Indians are  presently having  cryptocurrency accounts  . It is also estimated that there are more than 6,000  cryptocurrencies   are in the world  . 

The existing cryptocurrency holders in India will get  90 days time to off-load their holdings .   

Present Legal position of Cryptocurrencies in  India  : 

RBI had in 2018   prohibited  all the entities like Banks , NBFCs , Payment Banks , wallets regulated by them  to  deal with or provide any service related to transactions involving Bitcoins and other cryptocurrencies .   In March 2020  ,  the Supreme court of India   , disposing of a writ petition filed by   Internet and Mobile Association of India   had   lifted the ban imposed by Reserve Bank  of  India  in 2018 on  Bitcoin and other cryptocurrency Trading in India .  No guidelines had been issued by RBI after Supreme Court decision .  Now after a  gap of  22 months , Government of India   is proposing the above bill to ban cryptos . 

Position in other countries :  El Salvador  has made  the leading  cryptocurrency  Bitcoin  as its legal tender . Some  Asian countries like  China , Thailand , Indonesia   have banned the use   of   cryptocurrencies  . Some countries like USA and Japan have  permitted the use with restrictions . Some European countries are regulating the use  . 

One can read the complete draft of  the bill  in the website of PRS India 

 BITCOIN  PRICE CROSSES USD 60K   AGAIN : 

​DATED 17.10.2021  :  Bitcoin   has crossed    USD 60,000  per piece again  and it's now  at around USD 60,914    .  During the day  Bitcoin  reached  USD 62,200  before retracing to current levels .   During 2021  , BTC   has more than doubled   its value   from  yearend peak of   USD 29,390 .  During April 2021  , Bitcoin price had reached its all time high of USD 64,888  and subsequently it had fallen to  level of USD 30,000  in the first week of July2021 . Now again the price  has retraced to the current level . 

  

BITCOIN IS NOW  NATIONAL CURRENCY   OF EL SALVADOR  : 

Dated 08.09.2021 :  The president of   Central  American nation El Salvador  Mr Nayib Bukele  announced yesterday  that the  country will  adopt Bitcoins as National currency  , along with  the  present recognized currency  U S Dollars . El Salvador is the first country in the world   to make  Bitcoins or any other cryptocurrency as  a legal tender . 

It is reported that El Salvador bought  200 Bitcoins  on the eve  of making it a national currency .  It is reported that the government  is planning to gift USD30 equivalent Bitcoins to its citizens who opt to open Bitcoin accounts .   The government has also developed an APP   called   "Chivo Wallet," to store Bitcoins by   its citizens   . The  application created by the government  will deliver $30 worth of bitcoin to people to promote its use. Chivo wallet easy conversion of USD to Bitcoins and vice versa . One can download the App   at https://apkglobe.com/en/chivo-wallet-apk/download/15656

In meantime   value of Bitcoin  against USD  crashed around 10 %  yesterday and it is trading at  USD 46,600  . We have  to wait and see  how  the  central American  country will be able to manage its economy with a highly volatile  virtual currency  as current economic situation of the country  is not rosy at all  . 

 NO ADDITIONAL KYC REQUIRED FOR CRYPTOCURRENCY TRANSACTIONS :   RBI CLARIFIES 

Dated 01.06.2021 :  It was reported    by many   newspapers and   portals that  some banks   have  warned  their clients  now  against  cryptocurrency transactions  quoting RBI  circular  RBI circular DBR.No.BP.BC.104/08.13.102/2017-18 dated April 06, 2018      . The  said order has already been set aside by the Supreme court  in March 20 .   Hence  Reserve bank of India   has asked banks not to take any action based on   the basis of  said circular   .    The  clarification confirms that banks cannot      restrict   the  cryptocurrency transactions of their clients  on the basis     of RBI'S earlier ban  . 

However   Reserve Bank of India    has asked  Banks   to  continue to carry out    usual customer due diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.    Hence it is clear now   that    banks cannot prevent Bitcoin  transactions    in KYC compliant  accounts with them . 

 For RBI  Notification dated 31.05.22021 ,  CLICK HERE 

BITCOIN MAKES  NEW PEAK AT  USD 61,500     :  

 DATED 14.03.2021  :  Bitcoin   has crossed    USD 60,000  per piece   and it's now  at around USD 60,780     .  During the day  Bitcoin  reached  a new peak of USD 61,556  before retracing to current levels .   During 2021  , BTC   has more than doubled   its value   from  yearend peak of   USD 29,390 . The victory march of Bitcoin is continuing   in the month of March also  .  

  The  last  year (2020  )  had also  given  a bumper return of  more than 300 %   to the investors    in  Bitcoin ( BTC )   as its prices    peaked to  USD 29,390  . Bitcoin prices were  at USD 7,200   in January1st , 2020 .    

What a remarkable  price  journey  for a currency  which was valued just 0.6  USD per  BTC  in 2009  when  it started trading . 

 HAVE OPEN MIND ON CRYPTOCURRENCIES  :  MOSF GOVERNMENT OF INDIA 

Dated 07.03.2021 :  While speaking at the Entreprenuers Organisation - Punjab Chapter. yesterday  , Mr Anurag Thakur , Minister of State ( Finance ), Government of India has  called for   evaluation  of cryptocurrencies  and the other new ideas on the block chain technology  with an open mind  . 

  He advised that  a High-Level Inter-Ministerial Committee  has been  constituted and Government would take a decision on the recommendations of the committee and the legislative proposal, if any, would be introduced in the Parliament following the due process .  
However he has batted  for encouraging the new ideas with open mind  .   He also told that  even PM Narendra Modi  is  also a strong advocate of embracing technology in various aspects of governance.   

   Actually  the details of the committee  report is not made  public   and  market was abuzz with  rumours  of banning of  private cryptocurrencies in India  .  However the words of the minister  indicate that   still the government has  not decided to  curtain down on the cryptocurrencies like Bitcoin  and investors in these currencies in India   may  relax for now  .   

​Source : Twitter account of MOSF 

FUTURE  OF CRYPTOCURRENCIES  IN THE WORLD AND IN INDIA 

Dated 21.12.2021  :   It's reported that there are more than 3000 cryptocurrencies  in the world and the most popular  by  market cap and price is  the Bitcoin  ( BTC )  .  Many Governments  are Central banks are mulling  idea of creating their own  new  cryptocurrencies  (   Eg : China , India  )  . 

 The trading in Bitcoins  started in 2009    at   a nominal price   of 1BTC =  USD 0.60    . From thereon   its prices surged and crashed many times . But it's touching  new peaks    after  falls   and have raced to its peak now  .  In the current  surge , the price of Bitcoin  is    reaching higher and higher day by day , especially  from the year 2020   and now the price is at around USD 56,000 per piece . Its market cap has crossed   USD 1 trillion   .   

  Once   it was thought that Bitcoins were fit for use only for black marketers  , illegal traders and   black money holders .  It was rumoured that Indian black money holders were responsible for surge in BTC prices   in 2016 after   demonetization of Indian currencies .   Initially buying a pizza by paying 10  Bitcoins was    an  achievement  .  As cryptocurrencies do  not require / have  a central authority  , many were  afraid to deal with them     as no one knew whom to approach in case of   a problem .   Earlier   cryptocurrencies were treated as fringe  currencies   and  risky one  suitable only for gambling , as  their values  gyrated up and down . 

 Now scenario has changed    . Now many    regular  commercial  entities   have  begin to recognize  the value of them   .  Many banks in the world are opening Bitcoin bank accounts  9 Eg : Goldman Sachs , USA ,  Chime Bank USA  , National Bank of Canada     Bitcoin debit and credit cards   are being issued on Visa Platform  .     Many commercial entities are  like Microsoft , Pizzahut , shopify  , Expedia    are accepting Bitcoins  for  their billing payments .  Tesla , famous auto maker , has disclosed that  they have bought Bitcoins worth USD 1.5 BILLION. 

     All the developments  that have happened in 2020 / 21 in the world   are pointing  that cryptocurrencies are gaining grounds , respectability and value   and they are going to stay    . While volatility  may still keep safe investors away .  

  FUTURE OF CRPTOCURRENCIES  IN INDIA   :     While  the world is moving with the  new forms of virtual currencies  , the future of cryptocurrencies in India is uncertain .  Already  a cryptocurrency bank is opened in India  .  While Reserve bank of India   has announced  that  they are toying with the idea of own  cryptocurrency , government  is in  the process  of forming a  new law to deal with them . 

​ With the rumour of  banning of existing   private cryptocurrencies  by the new law  gaining grounds   ,  investors   are   facing doldrums .   It's   estimated by some in the  cryptocurrency business that  Indians have invested   more than   USD 1 Billion   in the  Bitcoin market  .  No one is sure   whether to hold Bitcoins or not . Investors who have already invested in Bitcoins    are worried   whether they would be able to encash them in case  of banning by the Government  .   It is now to be seen whether the Government will ban  the  private  cryptocurrencies   or allow and regulate  the cryptocurrency business and services in India .  It is also to be seen how RBI  will bring out our own cryptocurrency  and with what features , terms & conditions . Hopefully , government will come out with  the new bill on crptocurrencies   to  clear the  air about future of bitcoin and other cryptocurrencies in India . 

INDIA TO BRING  FRESH LAW ON CRYPTOCURRENCIES  : 

Dated 19.02.2021 :  In an interview with a journalist  yesterday ( of ETV )   , the state  Minister for Finance  Mr Anurag Thakur informed that Indian Government  is in the process of bringing a new bill  on cryptocurrencies . He informed that the government   had formed an inter-ministerial committee on the issue which has given its report. Thereafter, a group of secretaries in the leadership of cabinet secretary   have  also submitted its report which will be submitted to the Union cabinet. If the Cabinet approves it then the government may introduce a cryptocurrency bill in the current session   of the parliament  to enact a law to regulate cryptocurrencies in the country.

INDIA EXPLORING ITS OWN CRYPTOCURRENCY   : 

Dated 26.01.2021 :  Reserve Bank Of India  ( RBI ) ​had in 2018   prohibited  all the entities like Banks , NBFCs , Payment Banks , wallets regulated by them  to  deal with or provide any service related to transactions involving Bitcoins and other cryptocurrencies .  However the Supreme court of India   , had   lifted  the ban imposed by Reserve Bank  of  India  in 2020   . Further there is no legal development in India  . 

Now  RBI , in  a booklet published on payment systems in India ,  has advised that  it is exploring the possibility as to whether there is a need for a digital version of fiat currency  (  cash  or Rupee notes ) and in case there is, then how to operationalise it.   It has also noted that  regulators and governments in India have been sceptical about these currencies  and are apprehensive about the associated risks  so far .  

In case RBI  finds and adopts and brings out a  new digital currency  which can be converted to Indian rupee , it will be saving  on printing , storing , transportation   and managing  notes and coins   which is having a sizable  cost now  .  General public  may also feel  ease in  having and using such currencies .   While in one hand people will be safe from  theft , counting , accounting and managing  cash  , they have to be careful of cybertheft , hacking  , phishing attempts and other crimes connected  with cyber world . Password maintenance will be the other  headache to be encountered   by the public . 

We have to wait and see how  RBI move  takes shape in the future .   

To know various  alternate payment system available in India , go through the RBI BOOKLET 

FIRST BITCOIN BANK   STARTS OPERATION IN INDIA 

14.01.2021  : A crypto bank   called   UNICAS has  started its    operations in India  with physical branches through a joint venture between Cashaa , a  London based cryptocurrency platform  and United Multistate co-op society  , Mumbai based  co-operative society .  Customers of the   bank can open bank accounts, buy and sell cryptocurrencies, obtain crypto-backed loans, as well as learn about crypto.  The bank pays  interest on the   cryptocurrency accounts   .   

Customers of the bank   can also maintain crypto savings accounts with Unicas and get interest in the same cryptocurrency as the deposit. For instance a bitcoin deposit will get interest in bitcoin. For rupee loans against crypto, the cryptocurrency has to be deposited in  the  wallet as collateral    and bank  promises the instantaneous approval  . The deposit acts as lien in case of default. 

It has opened a  branch in Jaipur , Rajastan  offering cryptocurrency services  and said  to be the first physical bank branch in the world to  offer such services  . It is reported that the  parent society has more than 56 ,000 customers with 16  branches in Maharashtra , Rajastan , Delhi and Gujarat  .    Unicas  is using  the regulatory licences  issued to  parent co-op society   to enter Indian  business . 

Unicas is  offering  various  cryptocurrencies that include  Bitcoin ( BTC)  , Ether ( ETC )  ,  Cashaa ( CAS )    &  XRP   for savings accounts and loans . 
 Presently there is a legal vacuum in India with regard to legality of cryptocurrencies , after  Supreme Court lifted than earlier ban  imposed by RBI  . Subsequently no law or order has been passed by the government   .  One has also have to keep in mind the risks involved   in investing  including volatility of  the market   before dealing in cryptocurrencies . 

 TO visit  the  website of the bank  ,  CLICK HERE 

WHAT IS BITCOIN ? WHAT IS A CRYPTO CURRENCY   ? 
​To know   all about them , CLICK HERE 

     SUPREME COURT      QUASHES   RBI BAN ON   BITCOIN  TRANSACTIONS  

Dated 04.03.2020  :   Today , the Supreme court of India   , disposing of a writ petition filed by   Internet and Mobile Association of India    lifted the ban imposed by Reserve Bank  of  India  in 2018 on  Bitcoin and other cryptocurrency Trading in India . 

RBI had in 2018   prohibited  all the entities like Banks , NBFCs , Payment Banks , wallets regulated by them  to  deal with or provide any service related to transactions involving Bitcoins and other cryptocurrencies .   

We have to wait for detailed judgement  and revised RBI guidelines in the matter .  

Updated  dated 29.04.2021 :  No guidelines has been issued by RBI so far . A new legislation is said to be under  preparation   / review by the Government of India  . Though there are many rumours  , no official announcement is  done so far . 
​
​Source : Media 

    RESERVE BANK  OF INDIA PROHIBITS  SERVICE TO  BITCOIN  TRANSACTIONS  BY BANKS AND OTHER REGULATED ENTITIES 

Dated 05.04.2018 :  Reserve Bank  of  India  today   prohibited  all the entities like Banks , NBFCs , Payment Banks , wallets regulated by them  to  deal with or provide any service related to transactions involving Bitcoins and other cryptocurrencies .  The  ban comes in to effect with immediate effect .  All the entities which are providing such facilities have to exit  in time bound manner   . RBI  will issue a circular shortly .   

The ban virtually ends  any dealing of any cryptocurrency in India  as no Indian will be able to buy / sell , make payment or receive payment  In India . 

However RBI has constituted  a internal committee  to study feasibility  of introduction of its own digital currency . the committee is expected to give its report before June 2018 .

​For Press release of RBI dated 05.04.2018 ,  CLICK HERE    

Subsequently  RBI  has issued  Notification  on    06.04.2018  , CLICK HERE to read the notification . 

 HDFC BANK DISALLOWS ITS CARDS FOR PURCHASE OF BITCOINS 

Dated 18.03.2018 :  It is reported that  HDFC Bank  , India  have informed  their  customers that they would be no longer  able to do the  transactions  involving cryptocurrencies including Bitcoins  using  HDFC Bank  debit or credit cards .     Already in February 2018  Citibank India  had  stopped  allowing its cards for purchase of bitcoins and other  cryptocurrencies .  In the February 2018 itself , the country's central banker  Reserve Bank of India had also warned   bank customers in India against investing in Bitcoins and other cryptocurrencies . 

BTCXIndia  and  ethexIndia  TO CLOSE OPERATIONS IN INDIA 

Dated   02.03.2018  :  Cryptocurrency     Exchanges   BTCXindia  and   ethexIndia  are closing down its operations in India .

In its website   ,  BTCXindia   dealing in Ripples  ( XRP )  has asked its customers not to make any  Indian Rupee or Ripple ( XRP ) deposits  with effect from 01.03.2018  . If  any  remittance is made , it would be automatically returned to the sender bank .  Further it has asked all its customers to withdraw all the deposits  both in Indian rupee as well as  in Ripple  ( XRP )  before 4th March , 2018 .  

 For further details , one may visit official site of BTCXIndia  , by  CLICKING HERE 

Similarly Cryptocurrency    Ethereum   ( ETH )  Exchange  ethexIndia    is closing down its operations in India . In its website   , it has asked its customers not to make any  Indian Rupee or  Ethereum   ( ETH ) deposits  with effect from 01.03.2018  . If  any  remittance is made , it would be automatically returned to the sender bank .  Further it has asked all its customers to withdraw all the deposits  both in Indian rupee as well as  in   Ethereum   ( ETH )  

For website of  ​ ethexIndia    CLICK HERE   


It is reported that the reason for closure of operations is the budget speech of Mr Arun Jaitley   wherein he had  advised the intention of government was to outlaw the cryptocurrencies . He had also announced the intention of government to bring suitable amendment  to the existing laws to this effect . 

SBI CARD CAUTIONS  AGAINST USE OF  BITCOINS 

Dated 21.02.2018 :  Today  SBI Card , a division of State Bank of India ,   advised its  customers  about the potential economic , operational , financial , legal , customer protection and security related risks  associated with  use of Bitcoins  .  However  , unlike Citibank   , it has not prohibited use of SBI cards  for  transactions involving cryptocurrencies .   But Citibank   earlier had informed their customers  that they would be no longer  able to do the  transactions  involving cryptocurrencies including Bitcoins  using Citibank debit or credit cards .   Already Reserve Bank of India has warned bank customers in India against investing in Bitcoins and other 

 CITIBANK INDIA DISALLOWS ITS CARDS FOR PURCHASE OF BITCOINS 

Dated 13.02.2018 :  Today  Citibank , India  informed its customers that they would be no longer  able to do the  transactions  involving cryptocurrencies including Bitcoins  using Citibank debit or credit cards .  Citibank has decided  not to permit usage of its debit or credit cards   for purchase of Bitcoins and other cryptocurrencies , given concerns of  potential economic , operational , legal , customer protection and security related risks  associated with such transactions.  Already Reserve Bank of India has warned bank customers in India against investing in Bitcoins and other cryptocurrencies . 

INCOME TAX DEPARTMENT SENDS NOTICES TO BITCOIN INVESTORS  : 

Dated 12.02.2018 : It is reported that  Income Tax department has sent more than 1,00,000  notices to the investors of Bitcoins   and other cryptocurrencies in India  to verify  whether they have paid due income tax on the profits made out of Bitcoin transactions   and reported the same in their Income tax returns .  It is reported that Mr Sushil Chanda  , chairman of  Central Board of Direct Taxes    disclosed the matter whilst speaking in an event organized in New Delhi by ASSOCHAM 

WORLD BANK CHIEF CALLS BITCOINS A PONZI SCHEME  

Dated 08.02.2018 :  Newspapers reported that Mr  Jim Yong Kim , World Bank Group president told in an event that  cryptocurrencies    like Bitcoins are  ponzi schemes  .However   world bank is looking in to the blockchain technology which uses  distributed ledgers to facilitate  secured trading of digital assets  .   Earlier in the week Mr Agustin Carstens  , chief of Bank of International Systems ( BIS )  had asked central banks to rein in cryptocurrencies  as they can cause  disturbances to the existing financial system .   

In the mean time , Bitcoin is trading at around USD 8,000   after falling from life time high of  around USD 19,300  in recent weeks . 

 GOVERNMENT OF INDIA WARNS AGAINST  INVESTING IN BITCOINS 

Dated 30.12.2017 :   Ministry of Finance , Government of India  has issued warning  people against usage of virtual currencies including Bitcoins , as they are neither currencies nor coins .  The statement says  virtual currencies   are not legal tenders   and are not authorized by either Government of India or Reserve Bank of India  . The notification lists  various risks associated with Bitcoins like volatility , hacking , loss of passwords etc. It  compares   the operation of Bitcoins  to Ponzi schemes and advises the citizens to  avoid Bitcoins as  they would be participating in BITCOINS  at their own risks . 

However  Ministry of Finance does not say that Bitcoins are illegal in India 

Ministry of finance notification  on its Facebook page  . CLICK HERE 

​​​NEW ARTICLES PUBLISHED  :
PRECAUTIONS WHILE  INVESTING
CLICK HERE TO READ 
----------------------------------------------------------------------
TAX ON RETIREMENT
MORE THAN 2000 VIEWS   IN ITS FIRST WEEK OF PUBLICATION  
 CLICK HERE TO READ 
----------------------------------------------------------------------------------------------------------------


  HOW TO  LINK YOUR AADHAR TO PAN   ?  CLICK HERE 

   AAYKAR SETHU  , NEW MOBILE APPLICATION FOR ALL YOUR INCOME TAX JOBS ​       

​New  Updated Article 
            
 TAX PLANNING FOR FY 2021-22 ( AY 2022-23 ) 
Comprehensive   Article on Income tax changes in Rules, Rates , Slabs , Rebates  and Estimation 

CLICK HERE TO READ 

Reserve bank of  India has warned as early as  in December 2013  about the risks associated in use of virtual currency including Bitcoins .   It has also repeated the message  on December 5, 2017 . The major concerns expressed by RBI  are 

​1. VCs are in digital forms and stored in digital wallets . They are prone to hacking , malware , loss of password  etc . LOSS OF WALLET MEANS TOTAL LOSS OF ASSET . 
2. Payments take place peer to peer basis  without intervention of a central agency  .  No recourse may be available for  disputes  between the parties . 
3. No asset back up for Bitcoin and  market prices are speculative . Prices are volatile and  volatility may lead to huge losses . 
4. Legal status of exchange platforms are not clear  and  users are exposed to legal and financial risks  . 
5 .  Usage of  Bitcoins from the counter party  may be for illegal / illicit purpose . Hence usage may unintentionally lead to breach of Anti-money laundering provisions   . 

For  RBI Press release dated 24.12.2013  , CLICK HERE 

We are not SEBI  registered advisor and the the articles contained in the website , including this page , is not an investment advice .   The articles here contain links to various external   sites .   We have not verified  the  authenticity or correctness of claims made on those sites .  We will not be responsible for  any    action taken  , any deals done or any other commercial transaction  on those sites . We  cannot be held for any loss arising out  of your investment  made as per the article . ​