The Future of Cryptocurrency in India: 10 FAQs Answered

By May 6, 20225 minute read
The future of cryptocurrency in India-10 FAQs Answered - WazirX

1. What is the future of crypto in India?

The future of cryptocurrency in India is a complex issue. Currently, the Indian Government has not yet granted the status of legal tender to crypto assets. However, in the latest developments regarding cryptocurrencies in the country, the Government has put cryptocurrencies in the 30% taxation slab. This indicates that the Government, for now, is testing the potential of the future of cryptocurrencies in India. 

Over the years, the stand of the Government has softened on the crypto assets. The Government has scheduled to introduce a crypto regulation bill in the parliament that will seal the future of Bitcoin in India in 2022 and other crypto assets. Financial experts interpret that by putting the cryptocurrencies in the highest tax bracket in the country, the Government is hinting investors to exercise caution till regulatory norms are introduced in the country. 

Importantly, the Government has announced to introduce digital Rupee, which will be issued and backed by the Reserve bank of India (RBI), just like the fiat currency. This shows that the Government is receptive to the changing global currency system and aims to include digitized currency options in the economic framework in India.

2. Is Cryptocurrency legal in India?

With more than 10 million active bitcoin investors in India, bitcoin and crypto transactions are unquestionably legal. Anyone can purchase, sell, or exchange cryptocurrencies under current legislation. They are, however, unregulated, as the Indian Government is still drafting a framework regarding regulations of cryptocurrencies, and as of now, there is no regulatory system in place for digital currencies. On the other hand, several crypto exchanges have not only self-regulated in compliance with KYC standards and enforced these for their users, but they have also aided the Government in evaluating its possibilities regarding the future of cryptocurrencies in India.

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3. Is it safe to invest in Cryptocurrency?

Cryptocurrency does have risks of market volatility and loss for investors, but this is because cryptocurrencies are largely unregulated. Due to the decentralized and public nature of its distributed ledger technology, the very foundation of cryptocurrencies, which is built on blockchain technology, is inherently secure. Every transaction, therefore, not only has a highly secure encryption process, but they’re also untraceable. As a result, Bitcoin and other crypto transactions are far more secure than online banking, money transfers through digital wallets, or peer-to-peer payment platforms.

4. Can I convert Bitcoin to cash in India?

Yes, you can convert Bitcoin to Cash in India. India provides one of the most profitable Bitcoin trading opportunities for Bitcoiners all over the world. If you play your card right, you can easily earn a fortune. Here’s how you can convert Bitcoin to cash in India. 

  • Register yourself on any prominent crypto exchange which lists the BTC/INR trading pair. For example, WazirX is the most prominent crypto exchange and lets you convert your Bitcoin to fiat currency quite easily. 
  • Transfer your Bitcoin to the wallet of the exchange you’ve chosen.
  • Once you’ve transferred, go to the trading page of the exchange platform and search for BITC/INR trading pairs. Then, enter details on the amount and rate at which you want to sell your Bitcoin and click on the “Sell” button.
  • After you’ve sold it, you can withdraw INR to your bank account, and the process is done.

5. Which Cryptocurrency will grow the most in 2022?

Although Bitcoin has consistently dominated the crypto market for over a decade now, several other cryptocurrencies, such as Ethereum, Litecoin, etc., have seen immense growth. Even joke coins like Dogecoin have become wildly prominent. So, instead of solely thinking about the future of Bitcoin in India 2022, you should also look forward to other potential crypto coins. So, here are the top 5 cryptocurrencies that will see maximum growth in 2022. 

Ethereum – Market capitalization: US$342 billion

Tether – Market capitalization: US$83 billion

Binance Coin – Market capitalization: US$64 billion.

USD Coin – Market capitalization: US$49 billionRipple – Market capitalization: US$30 billion

6. Is Bitcoin taxable in India?

Yes, crypto gains will be taxable in India in the following manner from April 2022:

  • 30% tax will be levied on all the profits made from a crypto transaction.
  • Cryptocurrencies received as gifts will invite tax. This will have to be paid by the receiver.
  • A 1% tax deducted by source (TDS) will be charged.

More clarity on the taxation on crypto is awaited.

7. Is it smart to invest in Ethereum?

RBI has been one of the most vocal entities in opposition to the circulation of cryptocurrencies in the Indian markets. While the Supreme Court has ruled against RBI’s circular of 2018, where the banks were directed to dissuade their customers from investing in cryptocurrencies, position holders in RBI still voice their concern over the future of cryptocurrencies in India. However, with the Government’s proposal of a crypto regulation bill in late 2021, RBI has been on its toes to understand the impact on crypto and digital assets in the country.

In January 2021, RBI set up two departments to oversee the drafting of regulations for fintech and cryptos in the country and to work on its digital currency. This is a relief to the people who invested in cryptocurrencies and is also hopeful for millions across the country who are awaiting the final decision on cryptocurrency regulation in India.

8. What is the RBI’s latest stand on cryptocurrency in India?

The Reserve Bank of India (RBI) recently issued an important clarification on cryptocurrencies stating that banks cannot use the April 2018 circular of the RBI to warn their consumers against cryptocurrency trading. This clarification comes after institutions such as the State Bank of India, and HDFC Bank issued warnings to their customers about dealing in virtual currencies, citing the RBI’s April 2018 regulation. 

Although the Supreme Court eventually overturned this ruling in 2020, it appeared that some of these banks were informing consumers that failing to follow this guideline might result in their cards being canceled or suspended. This clarification gives relief to the people who invested in cryptocurrencies and is also hopeful for millions across the country who are awaiting the final decision on cryptocurrency regulation in India. 

9. What is the future of Bitcoin in India?

The future of Bitcoin in India in 2022 looks promising with the introduction of tax laws in the country. However, more laws regarding regulations of cryptocurrencies are expected in the future. 

Again, it is crucial to emphasize that although the Government’s stance on cryptocurrencies has softened, it can still introduce strict laws. This is because digital currencies are an area where Governments across the world are still trying to ascertain their impact on the economy. So in a developing nation like India, strict norms might be introduced to test the potential of a digital currency model.

10. Which is the best exchange to invest in cryptocurrency in India?

WazirX is, without a doubt, India’s best crypto trading platform. It is not only India’s fastest-growing cryptocurrency exchange but also the safest and most trustworthy cryptocurrency trading platform and boasts over 1,300,000 users. You can buy and sell Bitcoin, Ripple, Ethereum, Tron, Litecoin, and various other cryptocurrencies through WazirX. WazirX is available for download on Windows, macOS, Google Play Store, and the App Store.

How Many Cryptocurrencies Are There?

There are over 5000 other digital currencies available on the internet in addition to Bitcoins. The only problem is that they haven't gotten the users' attention. Besides Bitcoins, a few other digital currencies have gained popularity among users. It's been more than ten years since Bitcoins were first released, and now they've achieved new heights thanks to their phenomenal success.

Who Invented Cryptocurrency?

Satoshi Nakamoto invented cryptocurrencies and the technology that makes them function in 2009. The presumed pseudonymous individual or persons who invented Bitcoin used this identity. In addition, Nakamoto created the first blockchain database. Even though many people have claimed to be Satoshi Nakamoto, the person's identity remains unknown.

What Is The Safest Cryptocurrency To Invest In?

Bitcoin has had the highest market capitalization, has been around the longest, has the most experienced development team, and has enormous network impact and brand recognition. As a result, while trading cryptocurrencies, the rate of return on Bitcoin is commonly used as a benchmark. However, the risks associated with cryptocurrencies remain, and the safest cryptocurrency for you depends on your analysis.

Is Cryptocurrency Safe To Invest In?

Cryptocurrency investments are subject to market risks, but if sufficient security measures are not taken, trading accounts can be maliciously accessed. Investments come with risks and uncertainties, and we cannot claim that any digital currency investment is risk-free. Buying and selling cryptocurrencies can be risky even if the trader is knowledgeable about the market and treats their coins carefully.

Can I Invest In Cryptocurrency?

Yes, with exchanges like WazirX, you may invest in cryptocurrency in India. To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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