Catenaa, Sunday, May 25, 2025- India’s Supreme Court on Monday pressed the central government over its prolonged inaction on cryptocurrency regulation, calling the absence of a “clear-cut” policy concerning and potentially harmful to the economy.
The court’s remarks came during a hearing related to an alleged cryptocurrency fraud case. A bench of Justices Surya Kant and N Kotiswar Singh questioned why the Centre had failed to establish a regulatory framework despite the sector’s rapid growth and previous court directives.
Describing unregulated Bitcoin trading as a “polished form of hawala,” the bench warned that lack of oversight risks fostering illicit activity.
“There is a parallel under-market for it and it can affect the economy,” the court said. “By regulating cryptocurrency, you can keep an eye on the trade.”
The justices emphasized that banning digital assets outright would not be a prudent move, arguing that regulation—not prohibition—would best serve economic interests.
The bench recalled its own call nearly two years ago for clarity on crypto policy and noted the government’s earlier response that regulation was still under consideration.
“Banning may be shutting your eyes from ground reality,” the bench observed, pointing to the 30% tax levied on crypto gains as a tacit form of recognition. “If it is already acknowledged in this manner, why not regulate it?”
The court urged the Centre to consult experts and formulate a framework that balances oversight with innovation.
The issue remains unresolved amid India’s growing role in global crypto adoption and persistent regulatory ambiguity.
