A Cryptocurrency (or crypto currency) is digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. It is so happening with a multitude of people across the globe that yesterday their entire understanding of currency revolved around the piece of paper that they held in their hands, and today they are dazzled by the phenomenal idea of storing value digitally in something called a Cryptocurrency. The money used in Indian economy or any other economy is known as fiat currency as it is a legal tender or instrument issued by the government. People began toying with the idea of digital cash and virtual currency as early as the 1980s, when the earliest of ideas were translated into experiments around money. As an extension to the popular encryption algorithm RSA, American cryptographer David Chaum invented the first form of internet money as DigiCash in the Netherlands. But PayPal emerged a clear winner because it understood what the users actually wanted: a money on the already familiar web browser. PayPal offered a seamless peer-to-peer transfer mechanism and a neat way of accepting payments for the merchants. We all know where PayPal is today.
The 2008 economic crisis in the USA became a checkpoint in the historical timeline of world economy because it brought a much needed eye-opener for the callous behavior that had seeped into the evangelists of global finance.
This incident saw the emergence of an anonymous Good Samaritan who went by the name Satoshi Nakamoto and introduced Bitcoins. The first Cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto. As of May 2018, there were over 17 million bit coins in circulation with a total market value of over $140 billion. Bitcoin's success has spawned a number of competing crypto currencies, such as Litecoin, Namecoin and PPCoin. World only knows the name i.e. Nakamoto they don’t even know that whether he/she is individual or a group. Bitcoins basically work through a digital block chain which is difficult to track as it involves various steps or system as such. Central to the appeal and function of Bitcoin is the blockchain technology it uses to store an online ledger of all the transactions that have ever been conducted using Bitcoins, providing a data structure for this ledger that is exposed to a limited threat from hackers and can be copied across all computers running Bitcoin software. They are threat in this type of economy.
Following the legal aspect any type of gambling or contingent contract is void with some exception the best exception to such gambling is stock market. It is also a type off gambling the only reason it is valid is that it has a structure to monitor and to control and to forecast. These all type of gambling or market works on the concept of demand and supply. In the same sense Bitcoins to be more specific act in the same way. The only risk is that they can’t be traced and any misrepresentation or fraud can’t be caught which can create a problem in Indian economy. To protect the right of public at large Siddharth Dalmia along with other parties filled a petition under article 32 asking to prohibit all types of Cryptocurrency in India to maintain the fundamental right of public at large.
The order was passed by a Bench of Hon'ble Chief Justice Mr. Dipak Misra, Hon'ble Justice Mr. AM Khanwilkar and Hon'ble Justice Mr. D Y Chandrachud. To RBI and union of minister to see the concern and take important steps to solve the same.
As per the peytiton various Indian laws whci are been violated by cryptocurrency are:-
The Constitution of India, 1950;
Reserve Bank of India Act, 1934;
The Foreign Exchange Management Act, 1999 (FEMA);
The Reserve Bank of India Act, 1934 (RBI Act);
The Coinage Act, 1906 (Coinage Act),
The Securities Contracts (Regulation) Act, 1956 (SCRA);
The Sale of Goods Act, 1930 (Sale of Goods Act);
The Payment and Settlement Systems Act, 2007 (Payment Act).
Indian Contract Act, 1872 (Contract Act)
The writ requires the respondent to prohibit all website and all links to the same as violate of law so that no one can access it.
We are living in digital era, closing one thing down digitally will find other thing to access it. In India, it is even tough to ban porn sites and piracy of movies in such an economy banning a currency whose traces can’t be find is a tough job.
RBI has wide power to recognize such type of crypto currency as a valid currency but till now they haven’t recognized it neither they have shown a prohibit act to ban it. In fact, RBI has time and again raised concerns over the usage of such VCs and the potential risks associated with them.
Every technology come with a=some opportunity and with some loss it is good but with a limited use in a right way. These currency makes it easier to make payment in digital word but at the same time can increase terrorist funding. RBI has time to time declare that they should not invest in the same as there is no legal abidingness but never banned it.
India is a developing nation where a low amount of population knows to operate computer or other digital system. In such a situation introducing such a currency can create problems and will increase the amount of fraud. But seeing the future opportunity a better structure to regulate the same is been seen to regulate and monitor keeping the interest of all other current acts and constitution at large.
Virtual currency (VCs), as a medium of payment, are not recognized under Indian laws, and no specific regulation governing VCs has been introduced in India. There are also a few entities in India which are operating Bitcoin exchange/trading platforms dealing in buying, selling, storing, using and accepting Bitcoins such as Zebpay, Unocoin and Coinsecure. However, RBI, has, from time to time, issued cautionary advisories to the public stating that creation, trading or usage of VCs, as a medium of payment is not authorized by it and no regulatory approvals, registration or authorization have been obtained by the entities carrying on such activities.
These currency are not per se considered 'illegal' in India under the extant regulatory regime due to lack of any legislation, regulation or guideline prohibiting or governing its use/trading, it appears that the use, creation, trading or dealing in VCs is frowned upon by regulatory authorities and ED has initiated investigations against some of these entities. But, they can violate the money laundering act, hence seeing its practical applicability the further view with regard to the same from government is still awaited.