Cryptocurrency Trades in India Boom, I-T Finds 6 Lakh Active Users

The survey found that cryptocurrency worth Rs 17,800 crore has been traded in India.

Bitcoin is a virtual currency which is used for digital payment.

(Photo: The Quint)

In its first ever survey on trading of cryptocurrencies, the Income Tax Department found that there are over six lakh active cryptocurrency users in India, most of them in the 25-35 age group, a report in The Indian Express said on Thursday, 11 January.

The survey found that cryptocurrency worth Rs 17,800 crore has been traded on nine active cryptocurrency exchanges. As per the report in Indian Express, the survey was carried out by I-T Department's Bengaluru unit, which communicated to its counterparts across the country the manner of assessing virtual currencies for tax purposes.

(Photo: Liju Joseph/The Quint)

The wealth in cryptocurrency is notional unless the currency is liquidated. We have not been able to find the amount that has been liquidated and this exercise is still on.

An I-T official was quoted as saying

The report added that I-T sleuths also find it difficult to find the traders since there is no trail available of the liquidation.

Cryptocurrency is a digital currency exchanged entirely over the internet and no central authority can interfere in setting its value, which is decided purely by market forces. As per the website coinmarketcap.com, there are 1,355 cryptocurrencies being traded in 7,399 markets across the globe.

The website states that the total market capitalisation of these currencies are worth over $646 billion, as on 11 January, and Bitcoin, the most popular and oldest cryptocurrency, dominates with over 54 percent market share.

A single Bitcoin costs close to 12 lakhs in India which is Rs 2,30,000 more expensive than the US prices.

Strong Indian prices bucking the international trend is unprecedented and reflects surging demand that supply can’t keep up with , a report in Livemint said.

Sathvik Vishwanath, co-founder of Bitcoin exchange Unocoin, told Livemint that in December 2017 the company received 10,000 registrations daily.

The Indian government’s position on such currencies is that they are not legal tender. During the Winter Session of the Parliament, Finance Minister Arun Jaitley emphasised that those indulging in such transactions are doing it at their own risk.

One of the features of cryptocurrency is that there is lack of dependence on the state. It functions with a degree of anonymity. It operates within a virtual community which is created and enjoys the trust of that virtual community. The government is examining the matter. A committee under the chairmanship of the Economic Affairs Department Secretary is deliberating over all issues related to cryptocurrencies to propose specific actions to be taken.

Arun Jatiley

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