Legal Validity of Bitcoin in India

Abstract

In 2008-09, after the subprime mortgage crisis, the governments of several developed countries had to print billions of dollars to bail out banks and insurance companies. Bitcoins, unlike paper currencies, cannot be minted, but can only be mined by bots. Although bitcoin is yet to gain prominence as mainstream currency in India, the technology behind it — the Blockchain technology — has captured the attention of numerous Indian banks. In 2016, ICICI Bank revealed that it successfully executed transactions in global trade finance and remittances using Blockchain technology. Even as developed nations such as Japan and Russia contemplate legalizing the use of bitcoins, India, despite being at the threshold of a digital revolution, is yet to officially recognize the cryptocurrency. However, the biggest impediment that bitcoin supporters perceive to making this currency mainstream is the fact that several nations are treading very cautiously around bitcoin and do not have any concrete regulations governing them. This paper highlights the legal validity of bitcoin in India.