On June 20, CNBC India announced that the Indian government committee has ruled in favour of regulating Bitcoin and is currently establishing a task force to create various regulatory frameworks with the aim of fully legalising Bitcoin in the short-term.
Back in February of this year Japan recognised Bitcoin as a legal payment method. In April, the Indian government said it would set up an inter-disciplinary committee to take a close look at the circulation of crypto currencies in the country, which it did.
Chris Burniske of ARK Invest (crypto expert) , noted that the trading volumes in India had been on the rise prior to the announcement. Burniske previously revealed that the Indian Bitcoin exchange market is responsible for processing around 11 percent of Bitcoin-to-USD trades.
The three largest Indian Bitcoin exchanges include Zebpay, Coinsecure and Unocoin have been operating with self-regulated trading platforms with strict Know Your Customer (KYC) and anti-money laundering systems in place in spite the lack of regulations in the digital currency industry and market.
On Zebpay’s website, under legal (https://www.zebpay.com/legal) they present this:
Bitcoin is legal as per expert opinion
Nishith Desai Associates, India’s leading international law firm have published a white paper which concludes that bitcoin is legal in India. (where you can find a link to the white paper)
However, if you download the white paper you will see that it has been written in 2015.
They also produce information provided by the CIS, India’s leading Internet organization. The CIS helped Internet remain neutral in India in the 2015 net neutrality fight. They published a research post on their website which also states that bitcoin is not illegal under any existing laws.
However, once again this paper seems to be outdated.
Just below, you can see this cautionary note: “RBI (Reserve Bank of India) cautions users of virtual currencies,” and yet according to Cointelegraph, “Leading Bitcoin exchange Zebpay has revealed that the Indian government committee has ruled in favor of regulating Bitcoin.”
According to Zebpay’s blog post of March 23, they wrote, “Recently, there have been a few media reports that bitcoin has been declared illegal by the Indian government. No, that is not true. Nothing has changed regarding bitcoin’s legal status in India.”
So, is this a repeat situation?
If the Indian Government had truely ruled in favour of regulating Bitcoin I would have expected to see something on either Zebpay, Coinsecure or Unocoin’s website before anybody else. On Unocoin’s press page, the last entry is from December 1, 2016.
My next stop was the Reserve Bank of India website (https://www.rbi.org.in) . There was absolutely nothing, which I also found strange.
So, did CNBC India jump the gun on this story? Did this information really come from Zebpay or is it “fake news?” Or did they really rule in favour and these other actors are just waiting to get a definitive answer? It seems that every other post pushing this story all have links back to the same Cointelegraph story, so nobody else has really bothered to check into it.
If this does turn out to be true and India, the world’s second largest populated country, does take steps to regulate Bitcoin and recognise it as a legal payment method, it will help propel all these cryptocurrencies much higher. Stay tuned!
I don't think there is a definitive answer on this. The most recent language from the RBI (dated February 1, 2017) can be found here: https://rbi.org.in/scripts/bs_pressreleasedisplay.aspx?prid=39435
"The Reserve Bank of India had cautioned the users, holders and traders of Virtual Currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to, vide its press release dated December 24, 2013.
The Reserve Bank of India advises that it has not given any licence / authorisation to any entity / company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk."
There is no definitive answer. When the news came out I looked everywhere and couldn't find anything else. People need to be more curious about news headlines and where the sources are from.