Recently, India’s Supreme Court issued a stern admonition towards the government’s inertia in formulating cryptocurrency regulations. The court’s criticism surfaces in light of a growing number of crypto-related illegal activities, emphasizing the urgency for clear regulation in the world’s sixth-largest economy, home to 15% of global Bitcoin users.
Justices Surya Kant and Dipankar Datta insisted on the establishment of a specialized national agency. They envisage this body as a powerful tool, equipped to investigate and handle crypto-cases properly. Their request emerged amidst petitions concerning a surge of cryptocurrency frauds across Indian states, an issue estimated to have resulted in a shocking loss of INR 2,000 crore in 2022 alone.
The government’s procrastination on drafting a comprehensive crypto bill, initiated in 2018, has frustrated many. The lack of clear guidelines leaves investors, entrepreneurs, and even consumers navigating through uncertain waters. Meanwhile, the criminal world is exploiting these legislative gaps, contributing to the significant surge in crypto-crime.
Contrarily, the introduction of stringent cryptocurrency taxation laws in April 2022 was quick and decisive. The new tax laws were enforced during a bull market, when India was emerging as a global leader in the crypto market with numerous crypto unicorns and soaring trading volumes. Yet, the imposition of these tax laws dampened the formerly burgeoning Indian crypto market, leading to an exodus of established firms due to the lack of regulatory clarity.
While the Indian government grapples with creating a crypto bill that could protect investors and limit crime, it’s important to examine international practices too. Many countries are coming up with their unique solutions and India could certainly learn from these global efforts.
The Supreme Court’s reprimand is a significant move that underscores the need for immediate and comprehensive legislation. As the world rapidly embraces digital currency, it’s crucial that India’s regulatory environment evolves to provide a clear, fair, and safe platform for all parties involved in the crypto universe.