Cryptocurrency in India: It's Journey and Legal Aspects

In simple words, cryptocurrencies are in the form of digital currencies that can be utilised to making purchase of goods and services just like fiat money can. However, from the beginning, it has largely caused controversy due to its decentralized nature. It functions without interference from any intermediaries like financial and banking institutions or the central government. The chapter comprises the cryptocurrency journey in India and its legal aspects. In India, the cryptocurrency journey has not been very long, but there have been many ups and downs in that short time. In 2013, the cryptocurrency trend began in India with the involvement of RBI and then the Supreme Court. It has come to the conclusion that banning of cryptocurrency is not a solution, but it should be regularized for the safety of investors. VDAs have received significant legal recognition in India, further legitimizing the sector. Anti-money laundering (AML) regulations have been expanded to encompass the fast growing virtual digital assets (VDAs) sector and enforcement actions under the current tax laws have been started. The coordinated global efforts of financial and regulatory agencies reflect the changing importance and recognition of the virtual and distributed economy. CERT (Indian Computer Emergency Response Team issued guidelines in relation to security practices, procedures, prevention and response, the VDAs income became taxable, instructions related to digital loans, and the Prevention of Money Laundering Act, 2002 was constituted by the NDA Govt. to prevent money laundering activities in the country. The chapter discusses these legal aspects concerning digital currencies in detail.