India’s Supreme Court Advocates for Explicit Cryptocurrency Regulations Instead of a Total Ban

India’s Supreme Court has instructed regulatory bodies to create definitive guidelines for the management of cryptocurrency activities within the nation, as detailed in a report from May 20.

The court urged that regulators concentrate on crafting oversight structures that correspond to the growing acceptance of digital assets in India, rather than opting for prohibitive measures.

It was noted by the judges that the nation already imposes a 30% tax on crypto profits, indicating that this asset class is integrated into the financial landscape. They advocated for governance that nurtures innovation while also protecting investors.

In order to advance the situation, the court requested that regulators collaborate with technical professionals to develop a framework that ensures the sector operates effectively.

In response to the court’s suggestions, Sumit Gupta, co-founder of CoinDCX, announced the establishment of a multi-agency task force to facilitate regulatory discussions. This team is in the process of drafting a discussion paper likely to influence future policies regarding cryptocurrency.

Gupta conveyed his belief that clearer regulations could act as a stimulus for India’s digital economy. He mentioned that industry forecasts indicate that if the regulatory environment becomes more favorable, Web3 and cryptocurrency could contribute $1.1 trillion to India’s GDP by the year 2032.

The Supreme Court’s decision mirrors recent initiatives by the government to incorporate this burgeoning sector into the regulatory framework.

Earlier in February, Economic Affairs Secretary Ajay Seth indicated that India is reassessing its approach to cryptocurrency in order to align more closely with regulatory trends seen in the US and Europe, which tend toward cautious regulation instead of outright bans.

Concurrently, the government has enhanced its tax regulations for digital assets, requiring cryptocurrency companies to provide comprehensive transaction documentation. This includes necessary details about asset classifications, counterparties, and additional information essential for tax purposes.

These developments are expected, as India is recognized as one of the top five nations globally for cryptocurrency adoption, according to blockchain analytics firm Chainalysis.

Chainalysis noted that the pathway to crypto adoption in India is becoming clearer, attributed to ongoing interactions between industry participants and regulatory authorities.