Cryptocurrency regulation refers to the legal frameworks and rules set by governments to manage how digital assets are created, traded, taxed, and integrated with traditional finance. These regulations aim to protect investors, prevent illegal activities, and ensure financial stability, but approaches vary widely by country.
United States
Regulatory Bodies: The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are the main regulators.
Key Developments: Recent court cases have clarified that some crypto assets (like XRP) may be considered securities only in certain contexts. The approval of Bitcoin and Ethereum spot ETFs in 2024 marked a regulatory milestone, but the overall framework is still evolving.
Current Status: No single, unified law governs crypto. The Financial Innovation and Technology for the 21st Century Act (FIT21) passed the House in 2024, aiming to clarify CFTC’s role, but is not yet enforced.
India
Legal Status: Cryptocurrencies are neither fully legal nor outright banned. The Reserve Bank of India (RBI) and other agencies oversee aspects of crypto, but there is no comprehensive regulation yet.
Taxation: Profits from crypto trading are taxed at 30%, and a 1% TDS applies to transactions above certain thresholds.
Legislation: The proposed Digital Currency Bill aims to ban private cryptocurrencies while supporting a state-backed digital currency (CBDC) and blockchain innovation.
Regulatory Focus: The government emphasizes consumer protection, anti-money laundering (AML), and financial stability, while encouraging blockchain use in sectors beyond crypto.
