Bitcoin Investment in India
Bitcoin is a digital currency that operates independently of a central bank or government. It is a decentralized peer-to-peer network that enables the transfer of funds without the need for intermediaries, such as banks or payment processors.
In India, the use of cryptocurrencies, including Bitcoin, is not illegal, but the Reserve Bank of India (RBI) has issued several warnings to investors about the risks associated with cryptocurrencies. In 2018, the RBI banned regulated financial institutions from providing services to individuals or businesses dealing with cryptocurrencies.
However, in March 2020, the Supreme Court of India overturned the RBI’s ban, stating that it was unconstitutional. Since then, the use of cryptocurrencies, including Bitcoin, has been allowed in India.
Individuals can invest in Bitcoin in India by purchasing it from a cryptocurrency exchange. There are several cryptocurrency exchanges operating in India, including Zebpay, CoinDCX, WazirX, and BitBNS. These exchanges allow users to buy and sell Bitcoin using Indian rupees.
Investors can also trade Bitcoin on international cryptocurrency exchanges, but they must comply with Indian regulations regarding foreign exchange and taxation.
It is important to note that investing in Bitcoin, like any investment, carries risks. Bitcoin prices are highly volatile, and investors may experience significant gains or losses. It is recommended that investors only invest an amount that they can afford to lose and conduct thorough research before investing.
What is Bitcoin?
The concept of bitcoin can be traced back to a white paper published in 2018 by Satoshi Nakamoto. The currency which surged over $48000 at the time of this article was hovering over $12 in 2013. Bitcoin, to say least, is a virtual currency and is an online cash that changes hands over the internet. As of now, there are a plethora of services one can avail of using these virtual currencies.
How to buy Bitcoin in India?
- Choose a cryptocurrency exchange: There are several cryptocurrency exchanges available in India, including WazirX, CoinDCX, ZebPay, and Bitbns. Research the options available and choose the one that suits your needs.
- Sign up for an account: Once you have chosen an exchange, you will need to sign up for an account. This typically involves providing your name, email address, and other basic information.
- Complete KYC verification: To comply with Indian regulations, you will need to complete Know Your Customer (KYC) verification. This typically involves providing a government-issued ID and proof of address.
- Add funds to your account: Once your account is verified, you can add funds to your account. Most exchanges allow you to add funds using UPI, bank transfer, or other payment methods.
- Buy Bitcoin: Once you have funds in your account, you can buy Bitcoin. You can choose to buy Bitcoin at the current market price or place a limit order at a specific price.
- Store your Bitcoin: After you have bought Bitcoin, it is important to store it in a safe place. You can store your Bitcoin in a wallet provided by the exchange or transfer it to a personal wallet for added security.
How Does it work?
As we said, it is online cash and changes hands over the internet. This means transferring bitcoins from their wallet to another person’s wallet who is a party to that transaction. All transactions are recorded in a public list called a blockchain. One point that needs to be noted here is that every transfer of bitcoin is recorded but not with the names of buyers and sellers but just with their wallet IDs.
The blockchain is made of data units called blocks that hold all information about the transaction. All information is arranged in chronological order making a chain called a blockchain.
Is it legal in India?
The Supreme Court of India came out with a judgment overturning the ban imposed by the Reserve Bank of India in 2017. The Reserve Bank of India barred entities from dealing with Bitcoin. The decision made by the apex court brought the much-required clarity for companies and people that it can buy and sell it easily. But one must note that there are no rules and regulations and guidelines in place for resolving issues pertaining to Bitcoin in India. So risk factors can be a big dampener otherwise it’s legal to buy and sell Bitcoins in India.