The Future of Cryptocurrency in India: 10 FAQs Answered

By May 6, 20225 minute read

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.

Are Cryptocurrencies A Good Investment?

Cryptocurrency has the potential to make you extremely wealthy, and the potential to cause you to lose your money. Crypto assets, like any other investment, come with many risks and potential rewards. Fundamentally, cryptocurrency is an excellent investment, particularly if you want to gain direct exposure to the demand for digital currency.

Is Crypto Legal In India?

Cryptocurrencies are legal in India, and anyone can purchase, sell, and exchange them. It is currently uncontrolled, as India lacks a regulatory structure to oversee its operations. Per the Ministry of Corporate Affairs, companies must now record their crypto trading/investments within the financial year. In cases where a person receiving the gains is an Indian tax resident, or the cryptocurrency is regarded as domiciled in India, cryptocurrency transactions have been taxable in India

Is Mining Cryptocurrency Legal?

Cryptocurrency mining can be time-consuming, expensive, and sporadically profitable. Mining has an appeal for many cryptocurrency enthusiasts as miners are paid directly with crypto tokens for their efforts. The legality of cryptocurrency mining is dependent on where you live. In India, there is no restriction on crypto mining.

Which Cryptocurrency Is Best To Invest In 2021?

Many altcoins are flourishing to invest in. Some cryptocurrencies with great potential are Ether, Ripple, Tron, and more. Investors are trying to diversify their portfolios and are flocking to the leading cryptocurrencies. Many growing businesses are already accepting cryptocurrency as acceptable payment methods.

How Cryptocurrency Works?

Cryptocurrencies use cryptography technology to keep transactions and their units (tokens) secure. Cryptocurrency works via a technology called the blockchain. A blockchain is a decentralized technology that handles and records transactions across numerous computers. The security of this technology is part of its value.

What Are The Best Cryptocurrencies To Invest In?

The best cryptocurrencies to invest in would be the ones you study and analyze in detail. Some of the most popular cryptocurrencies include Bitcoin, Ethereum, and many altcoins such as Tron, Ripple, Litecoin, etc.

Is Ethereum Safe To Invest?

The Bitcoin market is unquestionably more volatile than the stock market. This may not be the market for you if you are incredibly risk-averse. Ethereum, on the other hand, may be a terrific investment for you if you're a diamond-handed investor who won't lose sight of short-term losses. Ethereum is a relatively safe investment as it is also based on blockchain.

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.

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.

Is Cryptocurrency Banned In India?

No, cryptocurrency is not banned in India. India has seen its ups and downs in the crypto sector concerning its legal status. The Reserve Bank of India (RBI) issued a circular in April 2018 advising all organizations under its jurisdiction not to trade in virtual currencies or provide services to assist anyone in dealing with or settling them. A government committee proposed outlawing all private cryptocurrencies in mid-2019, with up to ten years in prison and severe penalties for anyone dealing in digital currency. The Supreme Court overruled the RBI's circular in March 2020, allowing banks to undertake cryptocurrency transactions from dealers and exchanges.

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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