Introduction
Cryptocurrency is a digital currency which is created and managed through use of cryptography as encryption technique. The cryptocurrency which has captured most of the attention is Bitcoin. Bitcoin was launched in the year 2009 by a group whose pseudo name was Satoshi Nakamoto. In recent times, Bitcoin has created a huge hype in the global as well as Indian financial markets. Till now, none of the cryptocurrency has been recognised as legal medium of payment, i.e. Currency.
Some Cryptocurrencies available in market – Bitcoin, Ethereum, Binance Coin, Tether and many more are available in market.
The RBI has neither declared the cryptocurrencies as illegal nor accepted those as legal tenders. In the inclusive definition of the expression "currency" under the Foreign Exchange Management Act (FEMA), a cryptocurrency has not been termed as such and the RBI has not recognised it as a legal tender. On the other hand, the Securities Exchange Board of India (SEBI) has not accepted it as an instrument, as it is issued by a 'Server" and not by any person.
Notwithstanding above, various entities accept Bitcoins and similar cryptocurrencies as a mode of payment. It is recognised as a form of currency by them. In the absence of any regulatory framework in this regard, the trading and transactions are unaccountable and various issues relating to taxation thereof need specific consideration.
