The highest judicial court of India, on Wednesday, refused to hear a plea asking for a regulatory framework on cryptocurrencies. SC mentioned reasons as to why it chose to suggest government intervention, not judicial
As per a PTI report, the Supreme Court (SC) of India said no to a plea for a regulatory framework on cryptocurrencies. A SC bench including Justices BR Gavai and Augustine George Masih mentioned that it cannot “lay down the law” in this regard.
A cryptocurrency is a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority. They use blockchain technology which makes it extremely challenging to counterfeit. Popular cryptocurrencies in India include Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) among others.
Several petitions have been filed seeking counsel from the apex court since there are no laws currently with respect to cryptocurrencies. Justice Gavai responded by saying, “It is in the domain of policy makers. How can we issue any such direction? We can’t lay down the law.” The bench advised the petitioners to present the issue before the government of India if they wished to. The bench added, “The prayers made in the petition are within the domain of the legislature and the executive. In that view of the matter, we are not inclined to entertain the petition.”
In the beginning of last year, the centre had primed the SC that it hadn’t reached a decision regarding the cryptocurrency regulation mechanism yet. However, they mentioned that they continued to investigate offences related to the matter effectively.
Current regulatory framework in India
India’s regulatory approach to cryptocurrencies has undergone notable transformation in recent years, with the Reserve Bank of India (RBI), Ministry of Finance, and Securities and Exchange Board of India (SEBI) at the forefront of oversight. The government has adopted a taxation-first stance, levying a flat 30% tax on profits earned through cryptocurrency trading, with no provision to offset losses.
Additionally, a 1% Tax Deducted at Source (TDS) is imposed on crypto transactions exceeding ₹50,000 annually, aimed at tracking high-value trading activity. In a significant move to enhance compliance and curb illicit activities, the Finance Ministry brought Virtual Digital Assets (VDAs) under the ambit of the Prevention of Money Laundering Act (PMLA) in March 2023. This mandates crypto businesses to adhere to Anti-Money Laundering (AML) protocols and Know Your Customer (KYC) norms, similar to other financial institutions.
While private cryptocurrencies were restricted through a crypto bill introduced in the Lok Sabha in 2021, the development of a Central Bank Digital Currency (CBDC) was greenlit, positioning it as a regulated alternative to volatile digital assets. Notably, despite regulatory recognition for taxation and compliance, cryptocurrencies still lack status as legal tender in India. This dual stance reflects India’s cautious balancing act between fostering innovation and ensuring financial stability
