As per Indian Legal System;
- Rupee & Cryptocurrency as an Asset on Exchange (Under Foreign Exchange Management Act, 1999 and Prevention of Money Laundering Act, 2002):
1. On the Forex Exchange, a Rupee is traded as an asset (For example, USD to Rupee). In India, currency trading is carried out through the use of currency derivatives (similar to stock derivatives) like futures and options on recognised exchanges like NSE, BSE & MSEI.
2. On Crypto Exchange, a Cryptocurrency is traded as an asset (For example, Ethereum to Bitcoin). In India, cryptocurrency trading is carried out through the use of cryptocurrency (similar to stock) on recognised centralized crypto exchanges like CoinDCX, WazirX etc.
- Rupee & Crypto as a Currency on Exchange (Governed by SEBI as excluded in Payment and Settlement Systems Act, 2007) :
1.To purchase a Gold ETF, you will need to set up an account on the required platform and fund it with a currency such as a Rupee. For example, Gold ETF prices are listed on the website of BSE/NSE and can be bought or sold anytime through a stock broker. Payment transactions are done in Rupees. BSE/NSE is regulated by SEBI.
2.To purchase a Gold NFT, you will need to set up an account on the required platform and fund it with a cryptocurrency such as Ethereum. For Example, Gold NFT prices are listed on the website of WazirX NFT Marketplace and can be bought or sold anytime. Payment transactions are done in Ethereum. WazirX is regulated by SEBI.
- Rupee & Crypto as a Currency in Payment System (Governed by RBI under Payment and Settlement Systems Act, 2007):
1.To purchase a book online, you pay with a currency such as a Rupee through a payment gateway regulated by RBI.
2.To purchase a book online, you pay with a cryptocurrency such as Bitcoin through a cryptocurrency payment gateway. This is not regulated by RBI in India. In fact, cryptocurrency as a payment medium is not regulated in India.
