Are Cryptocurrencies, like Bitcoin or Ethereum, legal in India?

As on date of writing this update (ie. 05th January, 2022), India does not ban or prohibit circulation or operation of Cryptocurrency in any manner. However, there isn't any regulatory framework either, and the Government is seemingly working into this aspect. Few weeks back, sometime in October, 2021, it was announced that a Bill relating to creation of a regulatory framework will be tabled in the Parliament, but that did not happen and the same was deferred by the Government.

Previously, sometime back on 06th April, 2018, the Reserve Bank of India had, vide a circular, advised the Banks to not to permit settlement in respect of transactions to or from the Crypto exchanges. This circular of 06th April, 2018, was subsequently struck- down by the Hon'ble Supreme Court of India, on 04th March, 2020, holding the same to be 'disproportionate', in its judgement in Internet & Mobile Association vs. Reserve Bank of India [WP (C) 528/2017].  Despite the said judgement, some Banks continued to rely upon the erstwhile RBI's circular of 06th April, 2018, that resulted in several complaints. Consequently, the Reserve Bank of India (RBI) issued another circular dated 31st May, 2021, clarifying that its previous circular of 06th April, 2018 was no longer valid due to the judgement of the Hon'ble Supreme Court.

Hence, currently there's no ban on Cryptos in India. Hence, the Cryptocurrencies can well operate and circulate in India as such at present, unless their operation fall within any other legal embargos of the land. The above noted two circulars of Reserve Bank of India (RBI) and the judgement of the Hon'ble Supreme Court in Internet & Mobile Association vs. Reserve Bank of India (supra) can be found by clicking at the buttons provided below.

DB Law Offices

Visit https://dblo.org/notes-on-crypto for more info: Read the above noted Judgement of the Hon'ble Supreme Court and the circulars of Reserve Bank of India.

 

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