To understand the reason for confusion with respect to the legal status of cryptocurrencies in India, you have to understand the difference between legality and regulation.
Cryptocurrencies may not be illegal in India, but at the same time they are not regulated by RBI, India’s central bank. This means that anyone in India can buy, sell and trade cryptocurrencies.
However, RBI has no framework to regulate cryptocurrencies. Which means, there is no way to ensure that these currencies are not used to fund illegal activities,financial such as fraud, tax evasion, money laundering and other issues related to misuse of money.
Such regulations are in place for Rupee or for that matter every other physical (Fiat) currency in the world. Till that time, cryptocurrencies will not get to play a significant role in the country’s economy. However, trading in cryptocurrencies is as legal as trading in Indian Rupees.
A cryptocurrency exchange or DCE (Digital currency exchange) is a platform (an app/website or both) that allows users to trade cryptocurrencies or digital currencies. The users can trade crypto for real (read Fiat) money or other digital currencies. The exchanges accept all forms of electronic payments in exchange for cryptocurrencies. They typically charge a commission or a certain fee for each transaction.
Cryptocurrency Exchanges:
A cryptocurrency exchange (Digital currency exchange) is a platform (an app/website or both) that allows users to trade cryptocurrencies or digital currencies.
Dedicated cryptocurrency exchanges like Binance and Coinbase allow cryptocurrency withdrawals. Some of the exchanges can also convert the balance into prepaid cards that can be used to withdraw money from ATMs worldwide.
How can one make money from Cryptocurrencies in india?
Following are some of the ways an investor can make money from cryptocurrencies:
Trading: Trading in crypto is just the same as stock trading. You can buy and sell coins/tokens at different costs and make a profit from the margin between the sell and buy price.
Investing: Investing is perhaps the simplest, easiest and one of the best ways to grow your cryptocurrencies. However, you need to have patience and should be ready to play the long-term game. This is often referred to as Holding also although holding doesn’t necessarily need investing.
Bonus Coins: Participating in bonus coins programs is a great way to earn cryptocurrencies without spending anything. You just need to join a bounty program and perform some tasks.
Trade with Cryptocurrencies: If you sell any services or products then you can start accepting payments in cryptocurrencies.
Staking: Staking is basically investing or locking up funds in a cryptocurrency to earn additional cryptocurrencies as the interest of your investment.
Crypto Dividends: As the name suggests, they are very much the same as stock dividends. You buy crypto and hold it for a long period to earn dividends.
Referral programs: Referrals are the easiest way to jumpstart your crypto journey. Almost every crypto app and website has a referral program and if you know other people who are curious about cryptocurrencies then you can get a decent amount of crypto from referral credits.