During a May 2025 hearing, India's Supreme Court advocated for the necessary regulation of cryptocurrencies instead of an outright ban, indicating an important step towards legitimizing digital assets.
Supreme Court’s Discussion on Crypto Regulation
India's Supreme Court stressed the need for clear regulatory policies regarding cryptocurrencies. Justice Suryakant highlighted the contradiction in taxing cryptocurrency at 30% without having clear rules in place. He pointed out that if the government can levy tax on cryptocurrency, it should also regulate it.
"If you can tax it at 30%, also please regulate it as you have recognized it by taxing it." CITE_W_A
Challenges and Contradictions in Tax Policy
The absence of clear guidelines creates uncertainty for investors. For instance, many Indian investors are shifting their investments from cryptocurrencies to real estate due to the lack of secure investment protections. The Court highlights that taxing without regulation calls into question the legitimacy of crypto investments and raises security concerns.
Prospects for Crypto Regulation in India
As the government faces new challenges, the Supreme Court has urged for a comprehensive approach to regulate digital asset transactions. Clear guidelines could protect consumers while fostering economic growth. Discussions around specific regulations are ongoing, as a balance between innovation and economic security needs to be found.
The situation with cryptocurrencies in India necessitates prompt government action. The Supreme Court emphasized the urgency of establishing a coherent and clear regulatory framework to protect both investors and the financial systems of the country.
