- In 2018, Mr. Arun Jaitley, the then Minister of Finance of India, outlawed cryptocurrency due to its supposed dangers related to privacy, security and volatility in price.
- India’s Supreme Court lifted the ban in march 2020, that restricted banks from administering any services associated with digital currency.
- As of now there are no such laws that ban the crypto mining per se but there have been a number of cases that give rise to the clarity from regulators.
It’s been 11 years since Satoshi Nakamoto first released Bitcoin and it has spread like a wildfire throughout the world. However in India, adoption of Bitcoin has had a rocky past. In fact, in 2018, Mr. Arun Jaitley, the then Minister of Finance, outlawed cryptocurrency due to its supposed dangers related to privacy, security and volatility in price. However, the different spectrums of mining are still under heavy discussion.
History of Bitcoin’s Legality
As of now there are no such laws that ban the crypto mining per se but there have been a number of cases that give rise to the clarity from regulators and thus the aforementioned question. But in March 2020, India’s Supreme Court lifted the ban that restricted banks from administering any services associated with digital currency.
This removal of restrictions led to an increase in trading volume at exchanges like WazirX. Reportedly, it went up by 400%. However, the ban was lifted only for banking of cryptocurrencies and the mining part is still ambiguous. As of now Bitcoins are neither legal or illegal in India. Although it should be noted that the Central Bank still does not regulate it. This means any victims of crypto scams may not get their money back.
Bitcoin Mining in India
Bitcoin Mining may be defined as a peer to peer computerized procedure. It functions to verify and secure Bitcoin transactions. This crypto-mining whether a criminal offence or not is yet to be decided by the RBI. Furthermore, they imposed a ban on ASIC machines in the year 2017. ASIC machines are important for mining as it requires the best and up to date technology.
After the ban, many miners stopped their mining process while others chose to continue. We should also note that mining requires a huge amount of power in terms of electricity. According to a study, the worldwide activity of crypto mining consumes 60 terawatt-hours a year. The electricity cost is higher than almost all other factors in mining.
Previously, many miners were imprisoned and the cases are still going on due to the ambiguous laws on mining. So the experts suggest that it would be wise to stay out of mining in India however, one can always trade it.