Supreme Court Urges Centre To Form Clear Regulatory Framework For Cryptocurrencies
Supreme Court Urges Centre To Form Clear Regulatory Framework For Cryptocurrencies
India is developing a discussion paper and evaluating global norms related to the matter
The Supreme Court has urged the Central Government to establish a clear regulatory framework for cryptocurrencies while acknowledging their economic impact.
India is currently developing a discussion paper and evaluating global norms. It has formed an inter-ministerial group, comprising officials from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI) and the Ministry of Finance to observe global norms.
Meanwhile, the (RBI) Governor Sanjay Malhotra reiterated that the central bank was concerned about cryptocurrencies, highlighting their potential to destabilize financial stability and monetary policy.
He maintained, "There is no development on cryptos. A committee of the government is looking after this. Of course, we are concerned about cryptos because that can hamper financial stability and monetary policy.”
Recently, the apex court directed the Centre to formulate a ‘clearcut’ policy on regulating cryptocurrency, while underlining its impact on the economy. The bench had termed Bitcoin as an illicit trade like ‘hawala’ business.
In the absence of regulations, cryptocurrency is not yet illegal in India. The discussion paper will give the stakeholders an opportunity to give their views before the establishment decides on its policy stance.
In March 2021, the top court had set aside an RBI circular of April 2018, prohibiting banks and entities regulated by it from providing services related to virtual currencies.
In 2022, the government announced a 30 per cent tax on gains arising from cryptocurrencies. However, taxing income does not necessarily and explicitly legalise cryptocurrencies, which are regulated from the perspective of anti-money laundering law. Besides, income tax and Tax Deducted at Source (TDS) are levied on earnings from trading in such virtual digital assets. Also, GST is levied on cryptocurrency exchanges.
