Abstract

Cryptocurrency is seen as a digital virtual currency and cryptography which provide strong security to its dealing. Digital currencies include cryptocurrencies and central banks. Digital currencies play a vital role in reshaping the global financial system. The study focuses on examining the legal and policy framework surrounding digital currencies in India. It also highlights the regulatory developments and their socioeconomic implications. The journey of cryptocurrency in India began in 2013 followed by the advisories issued by the Reserve Bank of India. Highlighting the risk associated with cryptocurrency delays and further imposing bans on cryptocurrency. Which was further overturned by the Supreme Court in 2020. This judgement led to the proposal of the new crypto regulation bill in Lok Sabha. The focus was on banning private cryptocurrency and encouraging government-issued cryptocurrency. The central banking digital currency holds the potential for transformation of India's financial landscape. Due to recent developments and a massive increase in online users, there is a rapid growth of information and communication technology which introduced the concept of cryptocurrency in the market, involving transactions such as selling, buying and trading. In recent years, the concept of virtual currency has been in trend and used in a variety of systems. There are very limited countries that have a regulatory framework for dealing with cryptocurrency due to which most of the governments refuse to use it in their economic activities. The article is about the taxation and regulatory framework of the government of India and the future steps to be taken for better regulations. It also highlights the hazards and drawbacks of investing in cryptocurrency. India aims to balance innovation with financial stability in its regulatory framework. The evolving nature of digital currency is important to be monitored by India for harnessing the benefits of digital currency and positioning the country as a significant player in the global digital economy.

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