Cryptocurrency Rule: The Supreme Court had last month directed the Centre to formulate a ‘clear’ policy to regulate cryptocurrencies. The court had also underlined its impact on the economy.
Cryptocurrency Rule: Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday said the central bank is concerned about cryptocurrencies as they can disrupt financial stability. While interacting with reporters after presenting the second bi-monthly monetary policy review of the current financial year 2025-26, Malhotra was asked about the developments arising after the Supreme Court’s remarks last month on cryptocurrencies. He said there is nothing new to tell in the case of crypto. Malhotra said, “A committee of the government is looking into it. Of course, as you know we are concerned about crypto as it can disrupt financial stability and monetary policy.”
The Supreme Court had given this direction
The Supreme Court had last month directed the Center to formulate a ‘clear’ policy to regulate cryptocurrencies. The court had also underlined its impact on the economy. A bench of the Supreme Court had termed bitcoin trading as illegal trade just like ‘hawala’ business. India is currently working on a discussion paper for cryptocurrencies and an inter-ministerial group (IMG) is looking into global norms. This inter-ministerial group includes officials from RBI, market regulator Securities and Exchange Board of India (SEBI) and the Finance Ministry. Cryptocurrency is not yet illegal in India due to the absence of any law regarding this.
Taxing does not mean legalizing
This ‘discussion paper’ will give stakeholders an opportunity to present their views before India decides its policy stance on cryptocurrencies. The government had announced in 2022 to impose a tax of 30 percent on the profits from cryptocurrencies. Taxing income from cryptocurrencies does not mean legalizing it. Crypto assets are currently not under the purview of regulations in India. Rather, it is being considered from the perspective of anti-money laundering law. Apart from this, income tax and TDS (tax deduction at source) are levied on the income from trading in such digital assets. Also, Goods and Services Tax (GST) is also applicable on cryptocurrency business. It is worth noting that on March 4, 2021, the Supreme Court had canceled a circular of RBI dated April 6, 2018. Through this circular, banks and institutions regulated by RBI were banned from providing virtual currency related services.
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