Explore the legality of cryptocurrency in India, from initial restrictions to regulatory developments, and the Supreme Court’s pivotal decision in 2020 that revived crypto trading.

Is Cryptocurrency Legal in India?

Yes, cryptocurrency is legal to trade and invest in India, but it’s not recognized as legal tender. The journey of crypto legality in India has been tumultuous:

• 2018 Ban: The Reserve Bank of India (RBI) banned regulated entities from dealing in cryptocurrencies, citing risks related to criminal use and lack of government recognition.
• 2020 Supreme Court Ruling: This landmark decision overturned the RBI ban, allowing cryptocurrency trading to resume freely.
• Current Status: While trading and investing in cryptocurrencies are permitted, regulatory clarity is still evolving. Tax guidelines were introduced in 2022, taxing crypto gains at 30%, but private cryptocurrencies like Bitcoin remain unrecognized as official currency.

The government is working on introducing a Central Bank Digital Currency (CBDC) and considering regulations or restrictions for private cryptocurrencies. A complete ban seems unlikely due to the market’s growth and international guidelines from bodies like the IMF and FATF, which advocate regulation over prohibition.

India is navigating the fine line between innovation and control, signaling a future where crypto regulation, not elimination, will dominate the narrative.