WHAT IS AND INDIA’S STAND ON CRYPTOCURRENCY?
Author: kajal Agrawal, II year of B.A.,LL.B.(Hons.) from Amity University, Raipur
Recently, RBI has recommended a ban on cryptocurrencies citing “destabilising effects” for the country’s monetary and fiscal health. Cryptocurrencies have always been a controversy since the time it has been evolved that is from 2008 for using it as a medium of transaction. There are different countries having different perspective as to concerning for legalising this currency like El Salvador has permitted Bitcoin as a legal tender whereas there is China who has considered all the cryptocurrencies transactions illegal, imposing a complete ban, looking towards India where cryptocurrencies have not been completely considered illegal also there is no proper governing legislation covering the same.
Cryptocurrencies are basically any form of currency that exists digitally or virtually and uses a method called Cryptography, which is actually a method that secures your data and transactions from unauthorised access of outside users. It is also known as Fiat money, something which doesnot has any legal banking like gold and silverand is not designated as a legal tender. Many cryptocurrencies are based on blockchaintechnology which works as a decentralised network for secure transactions, it’s simply a peer -peer connection with the network systems of different nodes and is considered one of the most advanced system’s which can also be used to cast votes as well, many countries including India is looking forward to use this technology over banking as well. Although seeing up different world currencies have their own central authority for managing their unit’s cryptocurrencies on the other hand does not have any authorised authority for ensuring their management which also renders them independent without any government intervention or manipulation. The cryptocurrency method is something which was introduced 14 years ago and from that time this currency is not a easy transaction to opt foras it is like a digital trail and being a digital currency there will be a possibility for the governments to run through the accounts of the ordinary citizens and possibly tracking their transactions, and also not all e- commerce sites approves it as a payment option.
Now, there are different types of cryptocurrencies like Altcoin, USD, tether and more but from all these currencies Bitcoin is the most used digital currency over the world. This currency is something which was invested by huge business figures like ELON musk who is a known name in crypto world, where he stated that crypto is a good thing and then in 2021 Tesla decided to buy worth 1.5 billion dollars of bitcoin but after concerning towards the offloading he decided to back off from bitcoin and in 2022 sold 75% of the tesla’s bitcoin.
Key points: Cryptography, Blockchain technology, Bitcoin, Fait money
SITUATION IN INDIA CONCERNING THE SAME
As I talked above about the recent action of RBI on cryptocurrency, earlier as we have heard about an argument between RBI and Supreme court concerning the same. At the current situation there is no proper legislation in India covering the same issue on cryptocurrency, however in 2020 SC once again struck down a ban on trading of the virtual currency imposed by the RBI in 2018 which was actually about prohibiting the different entities who regulates up different currencies to be dealing in with any virtual currency transactions it is the same for any independent dealers or any regulated entities, this action was only held as invalid by the SC stating that RBI has not given an accurate proof as to why this should be prohibited and looking to the results that any entity indulging in the VC’s(virtual currency) didn’t cause any losses or any affect which is actually needed in exchange of the VC’s.
Prime minister Modi also held his views regarding the currency in the Sydney dialogue held in 2021, an initiative of Australian strategic policy institute, where India participated virtually where he actually stated that all Democratic nations should come together on cryptocurrency and listed 5 transactions on the same dialogue over India’s development on the financial sector. Looking to the latest information on digital currency is that in this year’s Union budget [2022-2023] presented by the finance minister it was seen that there is a chance of bringing a digital currency in coming years.
FEW CASES RELATED TO CRYPTOCURRENCY
Although seeing to the rise of cryptocurrency in the financial markets, some experts might have assumed that this can take over the normal or flat currencies in the future. However, if the situation doesn’t go in the way which is decided then it may cause to the long-term court cases. So, looking to some of the cases related to the crypto exchange are;
ORACLE VS. CRYPTO ORACLE, in this case the giant software Oracle filed a lawsuit against the blockchain start-up crypto oracle, with allegations of trademark infringement and cyber-squatting followed by the publicity of the start-up on CNBC. According to the complaint the, start-up used oracle’s name expand its network by boosting its reputation. Although it tried having a outside court settlement, but it started filing for crypto oracle’s trademark.
Concerning toward an Indian case which was filed concerning to the evolution of bitcoin in India and several protocols bring followed up by RBI to manage it, but it somehow lead to a differentiation between supreme court and RBI, THE SUPREME COURT OF INDIA VS. RBI, in which SC openly criticised about the handling provisions of RBI during the cryptocurrency ban in 2018 in its session the SC ordered RBI to respond within 2 weeks while the Indian government considered the cryptocurrencies illegal for Indians to use.
As far by now looking towards the two different views over cryptocurrency is very debatable as to how whether to legalise it or not, there are a lot of countries whom have already done it and there are more concerning over the same. It can be said that this will a huge contribution to the country’s financial sector and to its development abut with its own advantages and disadvantages, it is over the country’s as to how they take it forward but as we know that regulations are needed to prevent problems, and being on a proper security check should be one’s topmost priority whenever it comes to doing nay sort of transaction to be safe from any misuse and this can be better done with international collaboration, with the countries who are well- developed in their digital finance market to be well- versed, informed and being safe from any usage of derivative forms to take advantage of different assets.