Even though Bitcoin is legal in India at the moment, a ban looks imminent as the Reserve Bank of India is planning to launch its own digital currency. If the new bill is passed, it would be illegal to trade, possess, issue or transfer Bitcoin. All hope is not lost though.
Union Finance Minister Nirmala Sitharaman recently spoke about it at the India Today Conclave.
“My view on this is that, of course, the Supreme Court has commented on cryptocurrency and while the RBI may take a call on official cryptocurrency, from our side, we are very clear that we are not shutting off all options,” she said. That said, if the government will not ban Bitcoin, there’s a chance for people to invest in it.
A few experts are also suggesting that the government should invest in Bitcoin. The biggest reason for that is that Bitcoin’s value is increasing manifold. It’s value has increased 10 times since March 2020 and it has been endorsed by entrepreneurs like Elon Musk. Right now, the value of one bitcoin is Rs. 37,34,141. Imagine investing in Bitcoin in 2010 when one unit was worth just $0.08.
Why India shouldn’t invest in Bitcoin
One of the arguments used by cryptocurrency advocates is that one day, the Indian rupee will lose all its value and suffer financial deplatforming. In such a situation, investment in Bitcoin can provide some relief.
This is a far-fetched thought. India is linked to the world because of several economic transactions and it’s unrealistic to expect financial derecognition to strike the rupee.
Another roadblock that the government will face is that Bitcoins are valid only for a hundred years. Even though individuals may not be able to live that long, countries certainly do. Will the government allow a currency that cannot be used for most transactions?
Why India shouldn’t ban Bitcoin
We think that banning Bitcoin is a bit extreme. No other major country in the world has completely banned Bitcoin. Even China, which has banned mining and trading of Bitcoin, allows its citizens to possess the cryptocurrency. Yes, there is a possibility of Bitcoin facilitating money laundering but it’s not like there aren’t other ways available.
Should you invest in Bitcoin?
We suggest the ‘wait and watch’ approach towards Bitcoin. Since there is a possibility of a ban, investing in Bitcoin may be premature. That said, looking at the rate at which its value is increasing, it might be a million dollar mistake to pass up the opportunity.