Comprehensive Guide on How to Buy Cryptocurrency in India in 2019

Introduction:

In 2019, the world of cryptocurrencies experienced significant growth and popularity. India, being one of the fastest-growing economies, also witnessed a surge in interest towards digital currencies. If you are looking to buy cryptocurrency in India in 2019, this guide will provide you with a step-by-step process and valuable insights to help you navigate through the process successfully.

1. Understanding Cryptocurrency:

Before diving into the process of buying cryptocurrency in India, it is crucial to have a basic understanding of what cryptocurrency is. Cryptocurrency is a digital or virtual currency that uses cryptography for security. It operates independently of a central authority and is usually based on a blockchain technology.

2. Legal Framework in India:

It is essential to be aware of the legal framework surrounding cryptocurrency in India. In 2019, the Reserve Bank of India (RBI) issued a circular banning banks from dealing with cryptocurrency exchanges. However, this ban did not restrict individuals from purchasing cryptocurrency. It is important to stay updated with the evolving legal landscape to ensure compliance with regulations.

3. Choosing a Cryptocurrency Exchange:

To buy cryptocurrency in India, you need to select a reliable cryptocurrency exchange. There are several exchanges available in the country, each offering different features and services. Some popular exchanges include WazirX, Zebpay, and CoinDCX. Consider the following factors while choosing an exchange:

a. Reputation: Look for exchanges with a good reputation and positive user reviews.

b. Security: Ensure that the exchange has robust security measures to protect your funds.

c. Fees: Compare the fees charged by different exchanges to find the most cost-effective option.

d. User Interface: Choose an exchange with an intuitive and user-friendly interface.

4. Setting Up an Account:

Once you have selected an exchange, you need to set up an account. Here's how you can do it:

a. Visit the chosen exchange website.

b. Click on the "Sign Up" or "Register" button.

c. Fill in the required details such as your name, email address, and phone number.

d. Create a strong password and set up two-factor authentication for added security.

5. Verifying Your Account:

To comply with regulatory requirements, exchanges often require users to verify their accounts. This process may involve the following steps:

a. Upload a government-issued identity proof, such as an Aadhaar card or passport.

b. Provide a recent photograph or scan of your PAN card.

c. Complete any additional verification steps required by the exchange.

6. Depositing Funds:

Once your account is verified, you need to deposit funds into your exchange wallet. Here are the common methods to deposit funds:

a. Bank Transfer: Most exchanges offer the option to deposit funds through NEFT, RTGS, or IMPS.

b. UPI: Some exchanges support UPI-based transactions, allowing you to transfer funds directly from your bank account.

c. Credit/Debit Card: Certain exchanges provide the option to deposit funds using credit or debit cards.

7. Buying Cryptocurrency:

With funds in your exchange wallet, you are now ready to buy cryptocurrency. Follow these steps:

a. Navigate to the "Buy" section of the exchange.

b. Select the cryptocurrency you want to purchase, such as Bitcoin, Ethereum, or Litecoin.

c. Choose the payment method you prefer, such as bank transfer or UPI.

d. Enter the desired amount or the number of units you want to buy.

e. Review the transaction details and confirm the purchase.

8. Storing Cryptocurrency:

After purchasing cryptocurrency, it is important to store it securely. Here are the two common methods:

a. Exchange Wallet: Many exchanges offer the option to store your cryptocurrency in their own wallets. However, it is recommended to transfer your holdings to a personal wallet for enhanced security.

b. Personal Wallet: You can create a personal wallet, either software-based (desktop or mobile) or hardware-based (physical device). These wallets provide a higher level of security compared to exchange wallets.

9. Best Practices for Safe Cryptocurrency Ownership:

To ensure the safety of your cryptocurrency, follow these best practices:

a. Use strong and unique passwords for all your accounts.

b. Enable two-factor authentication for an extra layer of security.

c. Regularly update your software and antivirus programs to protect against malware.

d. Be cautious of phishing attempts and suspicious links.

e. Avoid sharing your private keys or mnemonic phrases with anyone.

FAQs:

1. Q: Can I buy cryptocurrency using credit/debit cards in India?

A: Yes, some exchanges in India allow users to purchase cryptocurrency using credit/debit cards. However, it is advisable to check the specific policies of the exchange you choose.

2. Q: Is it legal to trade cryptocurrencies in India?

A: While the Reserve Bank of India has banned banks from dealing with cryptocurrency exchanges, there is no specific law that prohibits individuals from buying or selling cryptocurrencies. However, it is important to stay updated with the evolving legal landscape.

3. Q: How long does it take to verify my account on a cryptocurrency exchange?

A: The verification process may vary depending on the exchange. It can take anywhere from a few minutes to a few days. It is recommended to check the exchange's website for specific details.

4. Q: Can I sell my cryptocurrency on the same exchange where I bought it?

A: Yes, most exchanges allow users to sell their cryptocurrency on the same platform. Simply navigate to the "Sell" section and follow the instructions provided.

5. Q: Is it safe to store my cryptocurrency in an exchange wallet?

A: While exchange wallets provide convenience, they are not as secure as personal wallets. It is advisable to transfer your cryptocurrency to a personal wallet for enhanced security.

Conclusion:

Buying cryptocurrency in India in 2019 requires a careful approach and consideration of various factors. By following the steps outlined in this guide, you can successfully navigate through the process. Remember to stay informed about the legal landscape and prioritize security to protect your investments.