Cryptocurrency made its debut in India in 2013, sparking enthusiasm among people from various social backgrounds who eagerly embraced it for investment and trading. During this initial period, the Indian Government did not provide clear regulations but instead issued cautionary advisories.
In this article, we will delve into India’s evolving relationship with cryptocurrency. From the outset, the Indian government displayed reservations toward cryptocurrencies. However, they demonstrated a keen interest in harnessing the underlying blockchain technology for government services. The Reserve Bank of India (RBI) expressed concerns regarding the functioning of cryptocurrencies and their inherent price volatility.
While the government has indeed made numerous attempts to regulate or ban cryptocurrency, as of now, there has been no strict and final resolution. However, there is a possibility of seeing some progress in the days following the G20 event. The G20 event may serve as a catalyst for further discussions and potential developments in India’s stance on cryptocurrencies.
Series of Notable Events in the advent of regulating Crypto in India.
05-09-2023- India Seeks Collaboration on Regulating Crypto as of G20 Summit
India’s Finance Minister, Nirmala Sitharaman, has disclosed that significant deliberations are currently taking place regarding the establishment of global regulations for crypto assets. She underscored the crucial need for international cooperation and collaboration among nations to address the various challenges associated with crypto assets effectively. in Mumbai, Sitharaman stated, “During India’s G20 presidency, we have put forth essential topics concerning the regulation and the recognition of the imperative for a framework to govern matters related to crypto assets.”
In the ever-evolving journey of India’s crypto regulations, the G20 Summit serves as a promising crossroads. As the nation opens its doors to global collaboration, the crypto landscape holds both uncertainty and opportunity, awaiting the dawn of a comprehensive and harmonious framework.
28-08-2023- India opening international doors to discuss crypto
During the B20 Summit in India on August 28, 2023, Prime Minister Narendra Modi highlighted the urgent requirement for a comprehensive global framework for cryptocurrencies. He emphasized the significance of adapting to the ever-changing digital landscape and stressed the importance of utilizing transformative technologies like artificial intelligence (AI) to navigate this evolving terrain effectively.
26-03-2022: By this time crypto turned out to be legal
Indian Finance Secretary, T.V. Somanathan, clarifies the terminology used in India regarding cryptocurrencies, referring to them as “crypto assets” instead. He emphasizes that the act of buying or selling crypto assets in India is not considered illegal. The government has established a tax framework specifically for crypto assets, categorizing them in a manner similar to winnings from activities like horse races or other speculative transactions. This distinction provides a legal framework for the taxation of crypto asset transactions in India.
02-02-2022: Finally, Crypto in India Were Taxed to 30%
During the 2022 Union Budget session, Finance Minister Nirmala Sitharaman announced a significant development in India’s taxation policy regarding cryptocurrencies and digital assets.
She disclosed that a 30% tax would be imposed on income generated from these assets.
This decision entails placing earnings from cryptocurrencies and non-fungible tokens (NFTs) within India’s highest tax bracket. Additionally, it was stated that any losses incurred from the sale of these assets would not be eligible for offset against other sources of income, thus discouraging trading and investment in digital assets. The implementation of this tax rule was scheduled to begin on April 1st.
Furthermore, Minister Sitharaman also unveiled plans for the central bank to introduce a digital currency in the upcoming financial year, utilizing blockchain technology and other supporting technologies.
29-01- 2021: Government introducing a bill on cryptocurrency
After this, the government announced its intention to introduce a bill aimed at creating a sovereign digital currency while simultaneously banning all private cryptocurrencies. This move posed a significant challenge to the revived cryptocurrency industry in India. The proposed bill seeks to prohibit private cryptocurrencies but may make exceptions to promote the underlying cryptocurrency technology and its applications.
04-03-2020: Uplifting ban imposed by RBI on cryptocurrency.
Following a series of contentious disputes between IMAI and RBI, the Supreme Court issued a favorable verdict in support of IMAI, thereby overturning the cryptocurrency ban imposed by RBI. This landmark decision was celebrated worldwide within the cryptocurrency community.
Breaking:
Supreme Court of India has struck off Reserve Bank of India’s (RBI) banking ban against
#Crypto
. The Court held that RBI Circular dated 6th April 2018 is unconstitutional.
— KoinX (@getkoinx)
March 4, 2020
28-01-2020:- Final arguments from both sides heard and concluded
Members of the Internet and Mobile Association of India (IMAI) gathered for the last round of arguments in the Supreme Court. During this session, the Reserve Bank of India (RBI) conceded that it lacked the authority to comment on the legality of cryptocurrencies and clarified that the RBI & Payment Settlement Act does not cover cryptocurrencies.
However, the RBI maintained that it possessed the authority to take measures if it determined that cryptocurrencies posed a threat to the payment system. Nevertheless, the RBI was requested to respond to the IMAI’s representation.
05-12-2019:- Governor of RBI Said No to Crypto
The Governor of the Reserve Bank of India, during a press conference, unequivocally expressed the RBI’s strong opposition to cryptocurrencies and emphasized the need to thoroughly evaluate their functionality.
Reserve Bank of India is completely against private digital currency says RBI Governor
@dasshaktikanta
,asserting the sovereign’s right over this function.
pic.twitter.com/qUMJqx3Lvr
— IndiaBits (@indiabits21)
December 5, 2019
07-06-2019:-
3rd Attempt to Ban Crypto, presented in Parliament Bill
The Indian Government introduced a bill titled “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019,” which aimed to prohibit all cryptocurrency-related activities. The bill proposed severe penalties for such activities, with the exception of cryptocurrency usage in experimentation, research, or education.
The bill specified a requirement to declare and dispose of any cryptocurrency holdings within 90 days of the act’s commencement. Individuals engaged in cryptocurrency activities could face a 10-year prison sentence, while exchanges could be penalized with up to 5 years of imprisonment. It’s important to note that this bill has been deferred indefinitely up to the present time.
06-04-2018:- Ban and Lift Ban of Crypto
The RBI’s statement directed financial institutions and payment providers to cease virtual currency transactions and services to entities involved. On April 6, 2018, the RBI declared cryptocurrencies illegal in India, effective from
June 6, 2018.
Cryptocurrency exchanges incurred losses due to suspended transactions and lack of banking access, leading to many closures and user losses. Exchanges challenged the ban in court, filing their first petition on May 1, 2018. The Supreme Court consolidated petitions opposing the ban and set a hearing for May 11, 2018.
On May 17, 2018, the Supreme Court allowed petitioners to submit a representation to the RBI. Zebpay ( The only major exchange at the time) suspended operations on July 4, 2018.
In January 2019, the Income-tax department issued notices to cryptocurrency investors, while some banks suspended services to exchanges, and others severed ties completely.
On July 23, 2018, SEBI objected to regulating crypto assets.
Then Exchanges formally requested the RBI to lift the ban, expressing willingness to undergo regulation.
Despite the crackdown, Unocoin launched a Bitcoin ATM in Bangalore on October 14, 2018, seized by cybercrime police a week later.
05-03-2018:- Second Attempt to Ban Crypto, CBDT
The Central Board of Direct Taxes (CBDT) presented a proposal to the Department of Economic Affairs, advocating for the regulation of cryptocurrencies. Subsequently, during the G-20 summit on March 19th and 20th, Finance Ministers and Central Bank Governors from G-20 member nations recognized the potential benefits of crypto-assets in enhancing financial system efficiency and economic growth. However, they also expressed collective apprehensions regarding issues such as safeguarding consumers and investors, ensuring market integrity, preventing tax evasion, countering money laundering, and thwarting potential terrorist financing activities.
01-02-2018: “No Support to crypto”, declarations by Finance Minister
In a parliamentary address, Mr. Arun Jaitley the then finance minister, categorically labeled virtual currencies as illegal forms of tender and emphasized that the government did not endorse their usage. However, he also expressed the government’s interest in exploring the potential of blockchain technology.
Following this, the State Bank of India (SBI) took a proactive role in facilitating collaboration between banks and technology firms. Major tech giants like IBM and Microsoft, alongside Skylark, KPMG, and ten commercial banks, came together to engage in this initiative.
07-11-2017: First Announcement to Ban Crypto, by RBI
The Reserve Bank of India has declared its intention to prohibit the use of cryptocurrencies as a means of payment throughout the country.
During a conference in Mumbai on November 6, 2017, RBI’s executive director,
S Ganesh Kumar,
suggested that digital currencies like Bitcoin and Ethereum would not be permitted for legal transactions within India. He stated,
“Our current stance on bitcoins is that we will not accept them for any payments and settlements, but the technology supporting cryptocurrencies will persist.
“
08-11-2016: Increased Bitcoin Adoption With Demonetization Announcement
After the Indian Prime Minister’s demonetization announcement, Bitcoin prices in India surged. Before this, they typically ranged from $800 to $900 per Bitcoin. However, within just 18 days of the announcement, Bitcoin prices on exchanges jumped to $1,020. In contrast, in the United States, where Bitcoin prices typically set the benchmark, they remained at $770 per Bitcoin. This difference in prices highlighted a clear premium on Indian Bitcoin exchanges during that time.
15-06-2016: The First Official concern was recorded
The Financial Action Task Force (FATF), established by the Reserve Bank of India (RBI), issued regulations and guidelines pertaining to virtual currencies. Expressing concerns that these digital currencies had the potential for fraudulent activities and posed a risk of being utilized by terrorist organizations for illicit donations.
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