Analyze the legal status of virtual currency

Since time immemorial, money’s form has been changing in the world. In 7th Century BC, Turkey was the first civilization to use minted silver or gold coins during that era. Nevertheless, it has always been important in a trade relation that some sort of payment method is involved, be it bartered goods or coined money. The first kind of fiat money was used in China in 1000 AD. And until the end of Bretton woods system most of the money was convertible to some precious metal or the other.


The latter is made up of blocks – that is, batches of validated transactions – which are chained together – that is, logically linked or tied to each other in such a way that any attempt to edit or otherwise corrupt the historical record is either prohibitively expensive or becomes immediately evident. Cryptocurrencies have popularly been used as a catch-all synonym for what is actually a broader term, namely crypto assets. Crypto assets include any digital asset that utilizes cryptography.

What are the risk with cryptocurrency?

Some of the problems with cryptocurrency are: 

  • 部分國家用戶的人身安全不佳(例如中國)
  • The crash problem in the cryptocurrency system
  • Impact the real currency system
  • Fluctuation in virtual currency value
  • 匿名
  • Black marketing for cryptocurrencies

What is the international Opinion on Cryptocurrency?

Cryptocurrency is considered to be a heated debate in the field of E-business and E-commerce in the present times. Trading of cryptocurrencies for cash is either banned and prohibited in some countries or is allowed or not regulated in others. A lot of countries are welcoming towards cryptocurrencies (For example, El Salvador currently lists Bitcoin as legal tender) while several others are still cautious and have their inhibitions.


What is the legal Status of crypto coin in India?

The legal status of cryptocurrency in India is difficult to be determined. The main problem with determining the legal status of how bitcoins should be handled is whether they are a currency, security, commodity, or something completely different.

While cryptocurrencies are commonly referred to as a “currency” as they have many common characteristics of one, the legal definition requires a currency to be issued, used and accepted by a country, which is not the case with virtual currency. Another problem with bitcoins and the likes is that not all the countries have legalized its use.

即使在 2018 年的聯盟預算中,長 Arun Jaitley 也重申加密貨幣在印度不被承認為法定貨幣。在他的預算演講中,當時的長說:“印度政府不考慮加密貨幣為法定貨幣,並將採取一切措施消除將這些加密資產用於資助非法活動或作為支付系統的一部分。”

However, Jaitley also added that the government would try and explore the blockchain technology, which drives bitcoin and other crypto-currencies. The recognition of blockchain technology for future use in the digital economy has received positive reactions from the industry. Though the budget did not specifically talk about how blockchain was to be explored, it should be noted that in digital economy the major use for this has been around crypto-currencies like Bitcoins.

What is the probable future of cryptocurreny?

If a SWOT analysis of the cryptocurrencies is done it can be deduced that it definitely has a stable future ahead in the world market. But before that it has an economical and legal battle to win. It is also important to still be noted whether various countries and their governments will still resist cryptocurrencies as a pan-global asset since it is outside their reach and operates beyond it or rather accept its usage and advantages.

There are still several challenges being faced by cryptocurrencies and thus it still would take time to gain the required popularity in the E-Business and E-Commerce market. Lack of place to go for in case of complaints or queries are troubles that are just adding to the disadvantages of cryptocurrencies.

Bitcoin and some more cryptocurrencies have also succeeded in attracting investors, and are getting more and more attention, but they have not succeeded yet as currencies. On the other hand, they definitely can be used for immediate investments. Thus, if we go by pure facts ‘Bitcoin is a potential investment-worthy crypto-commodity, which promises extremely high returns in the future with a possibility of huge risks.’

In conclusion

Every new currency has to face an uphill battle legally and technically. Though cryptocurrency is a huge step towards decentralized digital currency but it is not a fiat currency. Any currency in the world has government or its institution’s backing which cryptocurrency lacks. The value of these cryptocurrencies has also been highly volatile in nature.

The head of the Bank for International Settlements, Augustín Carstens, also said bitcoin threatened to undermine public trust in central banks and posed a threat to financial stability, and he signaled a global clampdown. In India the finance minister in 2018 government, during his budget speech on February 01, 2018 had cleared that the cryptocurrencies are not recognized as legal tender in India. Moreover, the various government has issued tax notices to the investors of the cryptocurrencies and has also warned its people to be aware while investments in digital currencies. Thus, the cryptocurrencies are not legal tender in India.


Related Posts

Comments (No)

Leave a Reply