The Supreme Court Of India Seeks Clarity Over The Legality Of Crypto
Indian authorities haven’t given any clarity on the legality of crypto and its role in the country’s economy. Hence, it is no wonder that India’s apex court seeks that clarity from the government.
Rising Crypto Scams In India Is A Cause For Concern
One of the reasons the supreme court of India seeks this clarity is the rising number of crypto-related scams in the country. The most recent is the Gainbitcoin scam, where the website owners allegedly defrauded their ‘investors’ of 87,500 BTC (worth about $2.65B based on the current BTC-USD exchange rate).
Over 8,000 persons contributed various amounts of BTC to the scheme in the hope of earning significant returns on their investments. A local media outlet reported that the court seeks that the government makes a verbal pronouncement over the legality or illegality of crypto in the nation. During a recent meeting with the solicitor general (Aishwarya Bhati), a bench of justices made it clear to Bhati that the government must choose a clear stance and make its view known to the public.
Confusion Among Indian Authorities Over Crypto Legalization
While presenting the union budget for the 2022/23 fiscal year, India’s finance minister, Nirmala Sitharaman, stated that gains from crypto-asset trading would be taxed at 30%. However, her submission was in stark contrast to the view of the deputy governor of India’s reserve bank (T. Rabi Sankar). He reiterated that private cryptocurrencies would be banned from the country.
Sankar claimed that legalizing crypto would pose a serious threat to India’s financial system. He further remarked that all crypto firms disregard KYC/AML protocols and CFT policies. Thus, making them a danger to the nation’s economic infrastructure. At that, Sankar said, “the best option for us as a nation (especially for our financial system) is to ban cryptocurrencies.”
Similar Views Among The Legislative Members
Also, members of the legislature and ministers have always stated that they would never approve any policy that seeks to “legalize the adoption of cryptos.” In an interview with the press trust of India earlier this month, T.V. Somanathan (India’s finance secretary) opined that “cryptos, gold, and diamond have several features in common, but no one talks about making gold or diamond a legal tender. Hence, there shouldn’t be any debate regarding whether to make cryptos a legal tender.”
Somanathan further explained that “there will never be the adoption of cryptos as a legal tender. Such adoption means cryptos can then be used for financial settlement purposes, which shouldn’t be acceptable in India.” He further claimed that the national digital currency (the digital rupee) is the only virtual asset that will be adopted as a legal tender.
Supporting Somanathan’s views was Bhagwat Karad (one of India’s union ministers), who said that cryptocurrencies could not be legalized in India. But he noted that no one could predict what can happen in India’s crypto sector over the long term. India needs clarification on crypto matters; this confusion isn’t going away soon.
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