How to buy Cryptocurrency in India: Beginner’s Guide

Cryptocurrency has become a buzzword in the financial world, offering a new and innovative way to invest and transact. If you’re wondering how to buy cryptocurrency in India, this comprehensive guide will walk you through the process, from understanding the basics to making your first purchase.

Understanding Cryptocurrency

Before diving into the world of cryptocurrency, it’s essential to understand what is Cryptocurrency. Cryptocurrency is a type of digital or virtual money that relies on cryptography to ensure secure transactions. Cryptocurrencies are not issued by any central authority (like national fiat currencies) but rather are adopted and become decentralized networks secured by consensus and blockchain.

Bitcoin (BTC) is the most popular, but there are literally thousands of other cryptocurrencies, like Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and many more. Different cryptocurrencies are for different uses and have different levels of acceptance and value.

Additionally, Reliance has launched India’s first official cryptocurrency, JioCoin, in collaboration with Polygon Labs. Currently, it is not available in any exchange to trade but with promising future prospects, JioCoin aims to reward users for engaging with Jio services, further demonstrating the potential of cryptocurrencies in India.

How to buy Cryptocurrency in India?

Step 1: Choose a Reliable Cryptocurrency Exchange

Select a trustworthy cryptocurrency exchange like WazirX, CoinDCX, ZebPay, or UnoCoin. These platforms allow you to buy, sell, and trade cryptocurrencies.

Step 2: Create and Verify Your Account

Sign up on the chosen exchange by providing your email address and creating a password. Complete the KYC (Know Your Customer) process by submitting documents like your Aadhaar card, PAN card, or passport to verify your identity.

Step 3: Secure Your Account

Enable Two-Factor Authentication (2FA) for an extra layer of security. Use a strong, unique password for your account and be cautious of phishing scams.

Step 4: Deposit Funds

Transfer INR (Indian Rupees) to your exchange account using methods like bank transfer, UPI, IMPS, or NEFT. Follow the instructions on the exchange platform to complete the deposit.

Step 5: Choose the Cryptocurrency to Buy

Research and decide on the cryptocurrency you want to invest in, such as Bitcoin or Ethereum. Consider factors like market trends, historical performance, and the technology behind the coin. Do proper due diligence before buying any coin.

Step 6: Place Your Order

There are two main types of orders:

• Market Order: Buys the cryptocurrency at the current market price. This order is executed immediately.
• Limit Order: Sets a specific price at which you want to buy the cryptocurrency. The order is executed only when the market price reaches your specified price.

Step 7: Store Your Cryptocurrency Safely

After purchasing cryptocurrency, store it securely in one of the following types of wallets:

• Exchange Wallet: Convenient but less secure as it’s connected to the internet.
• Software Wallet: Applications or desktop programs that offer better security than exchange wallets.
• Hardware Wallet: Physical devices that store your cryptocurrency offline, providing the highest level of security.
• Paper Wallet: A physical printout of your private and public keys, secure from online threats but vulnerable to physical damage.

Step 8: Monitor and Manage Your Investment

Keep track of your investment by staying informed about market trends, news, and developments in the cryptocurrency space. Set realistic goals and be prepared for fluctuations in the value of your holdings.

Is cryptocurrency legal in India

India is no exception as the financial world has been swept by cryptocurrency in India. As digital currencies such as Bitcoin and Ethereum gain popularity, Indian citizens are seeking to clarify these assets’ position in terms of legality in India. In this blog, we will discuss the status of cryptocurrency in India and how it impacts investors and companies.

The Legal Status of Cryptocurrency in India

India currently does not recognize cryptocurrencies as legal tender. That means you can’t use them for everyday transactions such as purchasing groceries or paying bills. Trading and investing in cryptocurrencies, though, is not illegal. It has not imposed an outright ban on private cryptos but has repeatedly voiced concern that they can be misused.

Regulatory Developments

The Cryptocurrency and Regulation of Official Digital Currency Bill was introduced by the Indian government in 2021, concerning a ban on private cryptocurrencies and the establishment of a framework for a Reserve Bank of India (RBI)-issued Central Bank Digital Currency (CBDC). But this bill was never enacted, so the regulatory environment remains in a state of flux.

Taxation of Cryptocurrency in India

The Union Budget 2022 introduced a 30% tax on income from the transfer of virtual digital assets. Additionally, a 1% Tax Deducted at Source (TDS) is applied to transactions exceeding ₹50,000 annually. These measures aim to bring transparency and accountability to cryptocurrency transactions.

Anti-Money Laundering (AML) Measures

In 2023 March, the government included cryptocurrencies in the scope of the Prevention of Money Laundering Act (PMLA) from being used in illicit activities in India.

The Role of Regulatory Authorities

The Reserve Bank of India (RBI), the Ministry of Finance, and the Securities and Exchange Board of India (SEBI) act as the primary regulators for cryptocurrencies in India. While the RBI has been warning about the dangers of Cryptocurrency, SEBI is working to regulate the market and protect investors.

Frequently Asked Questions