Here's a timeline of what's happened in India, from banning to regulating cryptocurrency, and what's next.

The government's stance on cryptocurrencies has shifted over the previous several years, from banning all private cryptocurrencies in 2016 to planning to regulate them as assets. Here's a look at the digital asset's history and where it might be going in the future.

In India, cryptocurrency first gained traction in 2013 when a Mumbai eatery declared that it would take it as payment. Unocoin, a cryptocurrency exchange, was created the same year, allowing Indians to buy and trade Bitcoin. In 2013, the price of bitcoin increased from $100 to $1,000.

The Reserve Bank of India (RBI) then stepped in and issued an advise against cryptocurrencies, cautioning the general population from using them. "Virtual currencies are not supported by a central bank, and their value is not underpinned by an asset, making them a matter of speculation," according to the RBI.

It is worth noting that two PILs were filed in the Supreme Court between October and November of 2017. While one advocated for the outright ban of cryptocurrencies in India, the other advocated for their regulation. Following this, the government established a committee in 2017-18 to investigate the issues surrounding digital currencies and make recommendations for appropriate actions.

Meanwhile, the RBI issued an announcement in 2018 prohibiting banks from dealing in cryptocurrencies or providing any services to anyone dealing with cryptocurrency exchanges. This had a significant impact on the industry and exchanges, as cryptocurrency prices plummeted. Blockchain experts have even left the country in search of greener pastures. As trading volumes fell, nearly 95% of jobs were reported to have been lost by August 2018.

The government formed committee issued its report in July 2019, proposing a complete ban on cryptocurrencies. However, the Supreme Court in early March 2020, nullified the RBI’s circular, and subsequently the ban. Revoking the ban, the Supreme Court stated that while cryptocurrencies are unregulated, they are not illegal in India. The news came as a fresh breath of air for the crypto market that bounced back to life. The price of Bitcoin reportedly jumped more than 700 per cent between April 2020 and February 2021. 

Rumours of a ban, however, continued to haunt the sector through 2021. In January 2021, the government stated that it will introduce a bill to create a sovereign digital currency, and ban all private cryptocurrencies. This was bad news for the industry that had just begun to revive. 

The government’s decision on the matter of regulating/ banning cryptocurrencies is still pending. Currently, there is no regulation or any ban on the use of cryptocurrencies in the country.