Bitcoin in India

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Bitcoin in India

Bitcoin bridges countries and continents and has the potential to become a new international currency standard. This means that anyone in the world can utilise the Bitcoin platform, in theory. However, in practise things are not quite so simple for those living in India.

Bitcoin is pioneering an age of decentralised money but governments and central banks still hold regulatory power over most Bitcoin and cryptocurrency exchanges. In recent years, Indian exchanges have been experiencing this influence, mostly in a negative way. 

Despite a strong need for crypto, regulatory inconsistency and confusion is slowing the progress of cryptocurrency adoption in India. Despite this, India still ranks as 11th in the world for cryptocurrency adoption, out of 154 countries. This demonstrates the demand for new monetary solutions in India.

For those who reside in India and wish to buy bitcoins with a debit or credit card or a bank account, this guide is for you. We aim to inform you on the current Bitcoin situation in India whilst also instructing you how to safely and legally purchase your own coins.

An Unsettled Past

As Bitcoin is utilised all over the world, India is naturally part of the digital money revolution. To date, India has at least 9 notable cryptocurrency exchanges, plus numerous other companiesexploring cryptocurrencies and blockchain development.

However, way back in 2013, the Reserve Bank of India (RBI) was sceptical of crypto and warned of the risks surrounding it. In December of that year, the RBI carried out raids on crypto exchanges. By January of 2014, the government did a full 180 by releasing a statement to the effect that they were not planning on regulating cryptocurrencies.

Fast forwarding to August of 2015, Indian central bankers began talking about the possible regulation of Bitcoin and other cryptocurrencies. Their argument for regulating cryptos was based on the criminal activities made possible by crypto.

By November 2016, global and Indian investment into Bitcoin was on the rise. Government had only made people more interested in alternative forms of money with their infamous withdrawal of 500 to 1000 Rupee notes.

In February of 2018, finance minister Jaitley said the country does not recognise crypto as legal tender and opposes its use for payments or criminal activity. The Reserve Bank of India then issued a ban on the trading of crypto via any banks under its auspices. On the 3rd of July 2018, the Supreme Court of India accepted the Reserve Bank of India’s cryptocurrency banking ban

The ban stated that financial institutions governed by the Reserve Bank cannot provide a service to any company that deals with cryptocurrency. Therefore, crypto exchanges in India cannot perform fiat-to-crypto (or vice versa) transactions. This set back India’s crypto industry dramatically, with many local exchanges forced to shut down or shift their operations overseas.

However, in 2019 a petition challenging this ban was brought to the Supreme Court of India. In March of 2020, the Supreme Court overturned the RBI’s ban, making cryptocurrency trading once more fully legal within India. The legal team behind the challenge were lauded as heroes by India’s crypto community.

The story doesn’t end there, unfortunately. In January of 2021, the Parliament of India announced its consideration of a ban on all private cryptocurrencies, which is to say any crypto not issued by the RBI. In the same month, the RBI announced it is exploring the issuance of an Indian CBDC (Central Bank Digital Currency). It would therefore appear that the RBI and elements of the public sector are at loggerheads with private business and Indian crypto users over the use of Bitcoin in India.

Even with this turbulent past, interest in Bitcoin in the country is still rising steadily. While Indians are likely to remain interested in crypto, their access to it could become greatly limited depending on how the current regulatory drama plays out.

A Hopeful Future?

Even though a second ban looms as a possibility, exchanges and other cryptocurrency companies will likely find ways to continue doing business, mostly by avoiding fiat all together. Many lessons were learnt during the previous ban.

For example, crypto-to-crypto transactions came to dominate the volume of Indian crypto trading previously. Some exchanges _ also decided to facilitate P2P trades. In this case, the exchange acts as an escrow service between two traders. Interestingly, this is the same path which most Chinese exchanges followed after a similar and ongoing ban by the People’s Bank of China.

Note that similar P2P solutions as now offered by native Indian exchanges have been offered by well-known international P2P exchanges for years. These exchanges have a proven track record, so their processes may be rather more refined. However, Indian exchanges will likely have larger volume traders among their clients.

How to Buy Bitcoin in India

The good news is that Coinmama still allows you to buy bitcoin with your bank account or debit / credit card. While banks in India may once more be banned from facilitating crypto-related transactions, it takes time for each financial institution to implement new regulations within their systems. Even in the worst case scenario of another ban, you can still attempt to make transactions via our service. It is of course possible that your transaction will be denied. To the best of our knowledge at the time of writing, you will not incur any legal penalties should that occur.

If you’re looking to buy bitcoin with your bank account or credit / debit card, then Coinmama facilitates this in a few simple steps:

Step 1 – Create Your Coinmama Account

1. Head to the main corporate header menu and select the light blue “Sign Up” tab at the top right (or click here). Note: if you already have an account, just sign in via the “Log In” button with your existing login details (or click here).

Coinmama website

2. Enter your email, password, first name, last name and your country of residence.

3. Look for an email from Coinmama asking you to confirm your account. Click the link in the email to complete the registration process.

** Note: for more information on how to create an account with us, click here.

Step 2 – Get Verified for Purchase

1. To purchase bitcoin (BTC), you first need to become verified.

2. It’s necessary to enter your personal information and upload your ID or passport, plus various other documents depending on which level of verification you wish to reach.

Our verification team works 6:00-23:00 UTC. If everything looks ok, you should be verified in about fifteen minutes during working hours, or as soon as we’re back at our desks. If we have a question about your documents or need more information, we’ll let you know. Once your account is verified, you’re ready to buy Bitcoin!

**Note: for further help with account verification, please click here.

Step 3 – Place your first order

1. Once signed in and verified, click the “Buy” button and select “Bitcoin”.

2. Next, choose the amount you would like to buy. You can select a package, or enter the fiat amount or crypto quantity you’d like to buy of up to roughly $5,000 (as of the time of writing) for card purchases or $15,000 for wire transfer purchases.

3. Supply your Bitcoin wallet address. If you’re unsure what this is, please check out this article. The address you enter is where we’ll send the coins which you buy. You can re-use this address for subsequent purchases or get a new one from your wallet, at your discretion.

4. Then, select the “Go to Payment” button.

Step 4 – Complete your Checkout

1. Select your payment method. Users worldwide can choose to buy bitcoin with a credit card, debit card, bank transfer and now Apple Pay.

2. Enter your payment details and click the “Buy” button.

Note: For card purchases, kindly note that only cards issued by VISA or MasterCard are accepted. As for wire transfers, they usually take 1-2 business days to post. This means that when paying via wire transfer,  you will get the rate at the time your money arrives at our account. This means that during times of high price volatility, you may get a rather different Bitcoin amount (either more or less) than expected.

Once payment has been made, our BTC transaction to your wallet’s address then needs to be confirmed by the Bitcoin network. In approximately 10 minutes, a Bitcoin payment will be broadcast from Coinmama’s wallet to the Bitcoin address you supplied in Step 3, point 3.

Note that during times of especially high traffic, your transaction may take longer than normal to appear as confirmed within your wallet. Ordinarily, the transaction will be confirmed within 10 minutes. For large amounts, this might take a little longer (up to an hour).

Conclusion

Bitcoin in India has had a rocky past and now faces an uncertain future with the newest ban. While the government in India is pursuing regulation with the stated aim of decreasing financial crime, it may come to realise that this latest ban was a step too far. This is what happened in South Korea, at least.

Bitcoin and other cryptocurrencies are here to stay, whereas regulation tends to change based on legal and political factors. For now, you can still invest in Bitcoin using Coinmama, although this window of opportunity may be closed in future. If that does occur, remember that it’s still entirely legal to earn Bitcoin by selling goods

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