Cryptocurrency! Is any of this legal in India?

The trillion-dollar question. While the RBI banned crypto in 2018, the Supreme Court quashed the order recently, calling the ban "unconstitutional". The crypto industry has steadfastly maintained that regulating, not banning, is the way out. Regulators and ministers have ruled out bitcoin being used for payments in India, something the industry has accepted. They are fine with it being only an asset class. Crypto as an asset class is legal as per the Court.

Banks, however, have taken a cautious view and detached themselves from crypto exchanges, fearing action from the RBI. This also happened at a time when crypto exchanges were seeing record activity, exacerbating the issue. Exchanges cannot function in the long term without banks.

Then how users investing and withdrawing?

Users are certainly able to invest and withdraw for the most part, although not at will. Exchanges are sometimes giving more features to new users temporarily, so that their first experience is smooth, while existing users bear the brunt of regulatory uncertainty. Some small banks are still working with exchanges, who are also working on alternate payment mechanisms, including peer-to-peer payments and an offline mode.

So, where do things stand now?

A lot of things are happening simultaneously. As prices fell in the last few days, it led to a massive selloff, but millions of Indians still seem excited by crypto. Exchanges are lobbying and working with regulators to get clarity as soon as possible. New domestic currencies are being traded, crypto is hailed as both incredible and fraudulent, often on the same day, but if user numbers are any metric, the crypto boom in India so far looks real.