Virtual Currencies In India: Legal Ambiguities And Regulatory Challenges
- IJLLR Journal
- 1 day ago
- 1 min read
Ms. Pallavi Minz, Research Scholar, National University of Study and Research in Law
Dr. Hiral Mehta Kumar, Assistant Professor of Law, National University of Study and Research in Law
ABSTRACT
The rise of virtual currencies has significantly altered the way financial transactions are conceived and conducted, bringing with it both innovation and regulatory concern. In India, the growing use of cryptocurrencies has outpaced the development of a clear legal framework, resulting in uncertainty regarding their legal status and regulation. This paper examines the legal ambiguities and regulatory challenges associated with virtual currencies in India, with particular attention to the absence of comprehensive legislation and the evolving responses of regulatory authorities. It analyses the roles of institutions such as the Reserve Bank of India, the Securities and Exchange Board of India, and the judiciary in shaping India’s regulatory approach. The paper also addresses practical issues including investor protection, financial stability, money laundering risks, taxation, and the anonymity of digital currencies. Drawing on judicial developments and comparative international practices, the study argues that sustained regulatory uncertainty hinders innovation, undermines investor confidence, and limits effective governance. The paper concludes by emphasising the need for a clear, balanced, and forward-looking regulatory framework that mitigates risks while supporting technological innovation in India’s digital economy.
Keywords: Virtual Currencies; Cryptocurrency Regulation; Legal Ambiguity; Financial Regulation; Digital Economy
