The Supreme Court of India has sought answers from the Centre on why it hasn’t formed “clear-cut” crypto regulations. The court questioned the Centre’s lack of action on framing crypto policies.
The matter came into light on Monday while hearing a case from a petitioner who faced allegations of cryptocurrency fraud.
A bench of Justices Surya Kant and N Kotiswar Singh said that unregulated Bitcoin trading was “nothing but a more polished form of Hawala.” Per a local report, they suggested that regulation could provide supervision on the sector and curb its use in illicit operations.
“Why does Centre not come out with a clear-cut policy on regulating cryptocurrency?” the court asked on Monday. “There is a parallel under-market for it and it can affect the economy. By regulating the cryptocurrency, you can keep an eye on the trade.”
Banning Crypto Will Not Be Wise: Supreme Court
Further, the court emphasized that almost “two years ago” it had sought clarification on India’s stance towards digital assets.
The Justice bench has also said that banning these wouldn’t be a wise decision, but regulating them would be.
“Nobody is saying to stop it, because wouldn’t not be wise for the economy,” the court observed. “Banning may be shutting your eyes from ground reality. But what about regulating it?”
Additionally, the court advocated the matter to be taken up in consultation with experts. “We aren’t experts. Experts would examine it, but some steps to regulate it and have an eye on it.”
Besides, Bitcoin trading profits taxed at 30% implies a form of “legal recognition,” the court added. “If it is already acknowledged in this manner, why not regulate it.”
Disconnect Between Bitcoin Trading Boom and Govt’s Sluggish Regulatory Response
This is not the first time India’s highest court has addressed the government’s unresponsive nature on regulating cryptocurrencies.
Early this month, law authorities highlighted the growing disconnect between rising Bitcoin trading and lack of proper regulations. The same two-judge bench reiterated that the legality of Bitcoin trading remains murky in India.
In February 2022, the court had asked the government to clarify whether cryptocurrency trading was legal in India and to outline a roadmap for enforcement.
However, in January 2024, the Centre responded to the court’s questions saying that a decision on regulating cryptocurrencies was still pending.
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