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Whether Cryptocurrencies Is Legal In India? Supreme Court

Whether Cryptocurrencies Is Legal In India?


The Supreme Court has asked the Centre whether dealing with cryptocurrencies like bitcoin is legal in India.

  • The Court posed the query while hearing a plea by one of the accused in the GainBitcoin scam, seeking quashing of the charges against him.
  • There’s no formal regulation on cryptocurrencies in India so far. The Centre has been working on crypto regulatory framework since 2019 but is yet to introduce a bill.
  • The central bank has always maintained a strong stance against private digital currencies. It had banned the banking system from aiding such trades, which was struck down by the Supreme Court in 2020.
  • In Union Budget 2022, finance minister Nirmala Sitharaman had proposed 30 per cent tax on earnings from cryptocurrencies and non-fungible tokens (NFTs).
  • She also said that losses from their sale could not be offset against other income, delivering another disincentive to trading and investment in digital assets.
  • The government also introduced 1 per cent tax deducted at source (TDS) on digital assets.
  • It also announced that RBI will introduce its digital currency in FY23 that will lead to more efficient and cheaper currency management system.
  • Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
  • They use Blockchain technology.
  • Examples: Bitcoin, Ethereum etc