Bitcoin is an investor’s delight but it, along with all private crypto currencies, might soon be banned, to make way for an RBI issued official currency.
The world’s best known crypto currency, bitcoin, crossed a price of $54,000 recently. If you had invested Rs 1 lakh in bitcoin two years ago, you would have made Rs 14 lakh by now. By comparison, that same amount invested in the stock market index would have fetched you around Rs 1.4 lakh. Even gold investment would have gone up by only around 50 per cent in last two years. And yes, it is not yet illegal to invest in bitcoin in India, even though it is not legal tender.
This is not an investment advice column, nor is it going to tell you where to find a broker so that you can invest in bitcoin or any other private crypto currency. The Reserve Bank of India had tried to ban investing in crypto currencies back in April 2018. Its circular basically said that you could not use your bank account, net banking, bank loan, or a prepaid wallet to invest in bitcoin. Prior to this prohibitory circular, for more than four years the RBI had repeatedly warned about the hazards and frauds involved in speculating in crypto currencies.
All this may soon be moot, since there is a bill tabled in Parliament which aims to make all trading and speculation in private crypto currencies illegal. The bill proposes to create a facilitative framework for an official digital currency issued only by the RBI.
Ajit Ranade is an economist and writes on the wheels that make Mumbai run — money and economy(Disclaimer: The views expressed here are the author’s own)