India towards Regularization of Virtual Assets: A Mammoth of Challenges

The easy accessibility and user friendly interface of internet has boosted the growth of E-commerce sector. The ease of digital payment has given birth to the concept of virtual asset. The currency of a country is a legal tender and medium of exchange. It possesses some value and is used to fulfill the financial obligations. The Central Bank of a country issues the currency. The virtual assets are based on blockchain technology which is based on encrypted blocks containing information and data shared across a large network. The data structure helps to maintain unchangeable record of data in time-structured format. The features like anonymity and decentralization has made the countries skeptical about its usage. Indian policy on blockchain technology is positive about adopting the technological changes. The taxation scheme in the Annual Budget for FY-2022-2023 has made stand of the government clear. However, the implementation and adoption of virtual currencies or virtual assets opens the door of huge legal, regulatory and infrastructural challenges. This paper shall contain the analysis of existing legal and regulatory framework. The author would also focus on the challenges pertaining to virtual assets.