ADVOCATE FILES FOR IMMEDIATE REGULATION OF BITCOIN IN INDIA

Last updated: June 30, 2025, 02:08 | Written by: Zane Alder

The cryptocurrency landscape in India is once again under scrutiny, this time propelled by a public interest litigation (PIL) filed in the Calcutta court.Advocate Bivas Chatterjee has taken a firm stance, urging the immediate regulation of Bitcoin's flow within and out of the country.This legal action underscores the growing concerns surrounding the anonymity and potential misuse of Bitcoin, particularly in facilitating illicit financial activities.India's journey with cryptocurrencies has been a rollercoaster, oscillating between outright bans and hesitant acceptance.The current situation reflects a deep-seated uncertainty, with law enforcement agencies expressing confusion and regulators grappling with the challenge of balancing innovation and risk mitigation.This PIL could be a pivotal moment, potentially forcing the government to either clearly define its stance on Bitcoin or establish a robust regulatory framework. In a significant stance, the main regulators and institutions in India consulted by the government advocate for the prohibition of private cryptocurrencies like Bitcoin and Ether, favoring the central bank digital currency (CBDC). In July 2025, several Indian government experts expressed support forWhat are the key arguments driving this call for regulation?How will this impact the future of cryptocurrency in India? Advocate Bivas Chatterjee filed a public interest litigation (PIL) on Friday in the Calcutta court to immediately regulate the flow of Bitcoin in andAnd what are the potential implications for investors and the broader financial system? El uso del Bitcoin fue maximizado despu s de la desmonetizaci n, cuando fue promovida la econom a sin efectivo. En India, los organismos de orden p blico est n confundidos el gobierno deber a prohibir el Bitcoin declar ndolo ilegal, igual que China, o debe haber un cuerpo regulador que controle su flujo. El anonimato es un problemaThese are the questions we'll delve into as we explore this developing story.

The Genesis of the PIL: Addressing Bitcoin's Perceived Risks

Advocate Chatterjee's PIL stems from a deep concern about the anonymity afforded by Bitcoin and its potential to be exploited for illegal purposes.He argues that Bitcoin’s inherent difficulty in tracking transactions makes it a favored tool for money laundering, terrorism financing, and other criminal activities. Executive Summary India's journey in regulating cryptocurrencies and digital assets represents one of the most dynamic policy evolutions in the global financial landscape. From the initial stance of near-prohibition to the current framework of regulated tolerance, the nation's approach reflects the complex balance between encouraging financial innovation and maintaining economic stabilityThis concern is not isolated; it echoes the sentiments of many regulators and law enforcement officials worldwide who grapple with the challenges of overseeing decentralized and often opaque digital currencies. Advocate Files for Immediate Regulation of Bitcoin in IndiaThe timing of this PIL is particularly relevant, coinciding with ongoing debates within the Indian government regarding the future of cryptocurrencies.

The advocate highlights that after demonetization, when cashless economy promoted, the use of Bitcoin was maximized. Skip to main content Bitcoin Insider. MenuThis suggests that the perceived need for anonymity and alternative financial systems increases during periods of economic uncertainty or government intervention.

Anonymity Concerns: Bitcoin transactions, while recorded on a public ledger (the blockchain), are often pseudonymous, making it difficult to link them to real-world identities.
Illicit Activities: The ease with which Bitcoin can be transferred across borders makes it attractive to criminals seeking to move funds undetected.
Lack of Regulation: The absence of a clear regulatory framework in India leaves law enforcement agencies with limited tools to investigate and prosecute Bitcoin-related crimes.

India's Tumultuous Relationship with Cryptocurrencies: A Historical Perspective

shut perspective visualization represents key aspects of this topic.

India's approach to cryptocurrency regulation has been a complex and evolving process, characterized by periods of both enthusiasm and skepticism. Calcutta advocate files for an immediate banning or regulation of the flow of Bitcoin in and out of India. Advocate Bivas Chatterjee filed a public interest litigation (PIL) on Friday in the Calcutta court to immediately regulate the flow of Bitcoin in and out of India, according to local news sources. In his petition, Chatterjee MoreUnderstanding this history is crucial to appreciating the significance of Advocate Chatterjee's PIL.

The Early Days: A Period of Uncertainty

Initially, the Indian government adopted a cautious stance towards cryptocurrencies, issuing warnings about their potential risks and volatility.This period was marked by a lack of clear guidelines, creating an environment of uncertainty for investors and businesses alike.

The RBI Ban: A Drastic Measure

In April 2018, the Reserve Bank of India (RBI) took a decisive step, issuing a circular that prohibited financial institutions from providing services to entities dealing in virtual currencies.This effectively crippled the Indian cryptocurrency market, forcing many exchanges to shut down or relocate their operations overseas.This ban was heavily criticized by the crypto community, who argued that it stifled innovation and economic growth.

The Supreme Court Intervention: A Respite for Crypto Enthusiasts

The RBI ban was challenged in the Supreme Court, which ultimately overturned the circular in March 2020.The court ruled that the ban was disproportionate and violated the fundamental right to carry on any trade or business. Advocate Files for Immediate Regulation of Bitcoin in India on Friday in the Calcutta court to immediately regulate the flow of Bitcoin in and out of IndiaThis decision was hailed as a victory for the Indian cryptocurrency industry, paving the way for a resurgence of activity.

The Current Landscape: A Search for a Balanced Approach

Following the Supreme Court ruling, the Indian government has been exploring various options for regulating cryptocurrencies.While there has been talk of a complete ban, the prevailing sentiment appears to be towards a more regulated approach. Litigation has been filed in an Indian High Court by a public prosecutor of cybercrime cases. Claiming that cryptocurrencies facilitate crime, he calls for their immediate ban or regulation.The government is reportedly considering a framework that would classify cryptocurrencies as assets rather than currencies, subjecting them to capital gains tax and other regulations.This approach attempts to balance the need to control risk with the desire to foster innovation in the digital asset space.

The Central Bank's Perspective: Advocating for a CBDC

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While the debate on regulating private cryptocurrencies like Bitcoin continues, the Reserve Bank of India (RBI) is actively exploring the development of a Central Bank Digital Currency (CBDC). India s journey with cryptocurrency regulation has been anything but linear. In April 2025, the Reserve Bank of India (RBI) issued a circular barring financial institutions from dealing with entities engaged in virtual currency operations. This move severely impacted crypto exchanges, forcing many to shut down or move operations abroad.The RBI believes that a CBDC could offer several advantages, including increased efficiency in payments, reduced transaction costs, and greater financial inclusion.

The main regulators and institutions in India consulted by the government generally advocate for the prohibition of private cryptocurrencies like Bitcoin and Ether, favoring the central bank digital currency (CBDC).This is because:

Control: A CBDC would allow the central bank to maintain control over the monetary supply and ensure stability in the financial system.
Oversight: The RBI would have greater oversight over transactions conducted using a CBDC, making it easier to combat financial crime.
Efficiency: A CBDC could streamline payment processes and reduce reliance on traditional banking infrastructure.

However, the introduction of a CBDC also raises questions about privacy and data security.Concerns have been raised about the potential for the government to track and monitor citizens' financial transactions.

The Dilemma for Law Enforcement: Clarity Needed

One of the key challenges highlighted by Advocate Chatterjee's PIL is the confusion among law enforcement agencies regarding how to deal with Bitcoin-related crimes.In the absence of clear regulations, law enforcement officials are unsure whether to treat Bitcoin as an illegal currency, similar to China's approach, or to adopt a more nuanced approach involving regulation and oversight.

This confusion has several implications:

Ineffective Investigations: Law enforcement agencies may lack the necessary expertise and resources to effectively investigate and prosecute Bitcoin-related crimes.
Inconsistent Enforcement: The lack of clear guidelines can lead to inconsistent enforcement of existing laws, creating uncertainty for businesses and individuals.
Increased Risk of Crime: The absence of regulation can create a permissive environment for criminals to exploit Bitcoin for illegal activities.

The PIL seeks to address this dilemma by urging the court to direct the government to either ban Bitcoin outright or establish a comprehensive regulatory framework that provides clarity for law enforcement agencies.

The Impact of Regulation on the Indian Cryptocurrency Market

The regulation of Bitcoin in India could have a significant impact on the cryptocurrency market, both positive and negative. Advocate Bivas Chatterjee filed a public interest litigation (PIL) on Friday in the Calcutta court to immediately regulate the flow of Bitcoin in and out of India. NEWS from Cointelegraph.com NewsA well-designed regulatory framework could bring legitimacy to the market, attract institutional investors, and foster innovation. Ou o governo deve proibir o Bitcoin declarando-o ilegal, como a China, ou deve haver um rg o regulamentador para controlar seu fluxo . O anonimato um problema. Segundo o advogado, o Bitcoin particularmente dif cil de ser rastreado, tornando-o assim um ve culo escolhido para transa es financeiras ilegais. Ele disse:However, overly restrictive regulations could stifle growth, drive businesses underground, and limit access to digital assets for ordinary citizens.

Potential Benefits of Regulation

Increased Investor Confidence: Clear regulations could boost investor confidence, leading to greater participation in the cryptocurrency market.
Attracting Institutional Investment: Institutional investors are often hesitant to invest in unregulated markets. Advocate Bivas Chatterjee filed a public interest litigation (PIL) on Friday in the Calcutta court to immediately regulate the flow of Bitcoin in and out ofA robust regulatory framework could attract significant capital from institutional sources.
Fostering Innovation: A supportive regulatory environment could encourage innovation in the blockchain and cryptocurrency space, leading to the development of new products and services.
Consumer Protection: Regulations can protect consumers from fraud, scams, and other risks associated with cryptocurrencies.

Potential Drawbacks of Regulation

Stifling Innovation: Overly restrictive regulations could stifle innovation and discourage entrepreneurs from entering the cryptocurrency market.
Driving Businesses Underground: If regulations are too onerous, businesses may choose to operate outside the legal framework, making it more difficult to regulate the market and protect consumers.
Limiting Access: Regulations could limit access to digital assets for ordinary citizens, particularly those who are unbanked or underbanked.
Increased Compliance Costs: Compliance with regulations can be costly, particularly for small businesses and startups.

Arguments For and Against Immediate Regulation

The debate surrounding the immediate regulation of Bitcoin in India is complex, with strong arguments on both sides.Understanding these arguments is crucial for appreciating the nuances of the issue.

Arguments in Favor of Immediate Regulation

Combating Financial Crime: As Advocate Chatterjee argues, immediate regulation is necessary to combat the use of Bitcoin for money laundering, terrorism financing, and other criminal activities.
Protecting Investors: Immediate regulation can protect investors from fraud, scams, and the inherent volatility of the cryptocurrency market.
Ensuring Financial Stability: Unregulated cryptocurrencies could pose a threat to the stability of the financial system. Advocate Bivas Chatterjee filed a public interest litigation (PIL) on Friday in the Calcutta court to immediately regulate the flow of Bitcoin in and out of India, according to local news sourcesImmediate regulation can help to mitigate this risk.
Providing Clarity for Law Enforcement: As previously discussed, immediate regulation can provide clarity for law enforcement agencies, enabling them to effectively investigate and prosecute Bitcoin-related crimes.

Arguments Against Immediate Regulation

Stifling Innovation: Opponents argue that immediate regulation could stifle innovation and discourage the development of new blockchain-based technologies.
Premature Action: Some argue that it is too early to regulate Bitcoin, as the technology is still evolving and its long-term impact is uncertain.
Lack of Expertise: Regulators may lack the necessary expertise to effectively regulate the complex and rapidly evolving cryptocurrency market.
Potential for Unintended Consequences: Regulations could have unintended consequences, such as driving businesses underground or limiting access to digital assets for ordinary citizens.

The Road Ahead: Potential Regulatory Frameworks

The Indian government faces a challenging task in designing a regulatory framework for Bitcoin that balances the need to control risk with the desire to foster innovation. Advocate Bivas Chatterjee filed a public interest litigation (PIL) on Friday in the Calcutta court to immediately regulate the flow of Bitcoin in and out of India, according to local news sources.Several potential models could be adopted, each with its own strengths and weaknesses.

Complete Ban

This option, similar to China's approach, would involve a complete ban on the use of Bitcoin and other cryptocurrencies.While this would effectively eliminate the risks associated with cryptocurrencies, it would also stifle innovation and prevent Indian citizens from participating in the global digital economy. In India, law enforcement agencies are confused Either the government should ban Bitcoin by declaring it illegal like China or there must be a regulatory body to control its flow. Secrecy a Problem. According to the advocate, Bitcoin is very hard to monitor, which makes it the vehicle of choice for illegal monetary transactions. He stated:A complete ban could also drive cryptocurrency activity underground, making it more difficult to monitor and control.

Regulatory Sandbox

A regulatory sandbox would allow cryptocurrency businesses to operate in a controlled environment, with limited oversight from regulators. Calcutta advocate files for an immediate banning or regulation of the flow of Bitcoin in and out of India. Advocate Bivas Chatterjee filed a public interest litigation (PIL) on Friday in the Calcutta court to immediately regulate the flow of Bitcoin in and out of India, according to local news sources.This would provide a space for innovation to flourish while allowing regulators to learn more about the technology and its potential risks and benefits. Posted by u/Cointelegraph_news - 1 vote and no commentsThis approach could be particularly useful for testing new blockchain-based applications and services.

Licensing Regime

A licensing regime would require cryptocurrency businesses to obtain a license from the government in order to operate legally.This would allow regulators to impose certain requirements on these businesses, such as capital adequacy requirements, anti-money laundering (AML) compliance, and consumer protection measures.This approach could provide a balance between fostering innovation and controlling risk.

Taxation Framework

The government could implement a taxation framework for cryptocurrencies, treating them as assets and subjecting them to capital gains tax.This would generate revenue for the government and bring cryptocurrencies into the formal financial system.However, the tax rates would need to be carefully calibrated to avoid discouraging investment.

Practical Steps for Crypto Investors in India

Regardless of the regulatory outcome, there are several practical steps that crypto investors in India can take to protect themselves and navigate the uncertain landscape.

Stay Informed: Keep abreast of the latest developments in cryptocurrency regulation in India.Follow reputable news sources and regulatory announcements.
Diversify Your Portfolio: Don't put all your eggs in one basket.Diversify your cryptocurrency holdings to mitigate risk.
Use Reputable Exchanges: Choose cryptocurrency exchanges that are licensed and regulated in other jurisdictions.
Secure Your Wallets: Use strong passwords and enable two-factor authentication to protect your cryptocurrency wallets.
Be Wary of Scams: Be cautious of get-rich-quick schemes and other scams that are common in the cryptocurrency space.
Consult a Financial Advisor: Seek professional financial advice before investing in cryptocurrencies.

The Global Context: Cryptocurrency Regulation Around the World

India is not alone in grappling with the challenges of regulating cryptocurrencies.Many countries around the world are exploring different approaches to regulating these digital assets.Some countries, like El Salvador, have adopted Bitcoin as legal tender, while others, like China, have banned it outright.Most countries are somewhere in between, experimenting with different regulatory frameworks.

Examining the approaches taken by other countries can provide valuable insights for India as it develops its own regulatory framework.Some examples include:

The United States: The US takes a fragmented approach, with different regulatory bodies overseeing different aspects of the cryptocurrency market.
The European Union: The EU is developing a comprehensive regulatory framework for cryptocurrencies known as MiCA (Markets in Crypto-Assets).
Singapore: Singapore has adopted a relatively liberal approach to cryptocurrency regulation, aiming to foster innovation while managing risk.

Conclusion: A Crossroads for Bitcoin in India

Advocate Bivas Chatterjee's PIL represents a critical juncture for Bitcoin in India.The call for immediate regulation underscores the persistent concerns surrounding the anonymity, potential for misuse, and lack of clarity surrounding these digital assets.The outcome of this legal challenge could significantly shape the future of cryptocurrency in the country, influencing investor behavior, business strategies, and the overall trajectory of the digital economy.While a complete ban remains a possibility, a more likely scenario involves the establishment of a regulatory framework that seeks to balance innovation with risk mitigation.

Key takeaways:

The PIL highlights the urgent need for clarity regarding Bitcoin's legal status in India.
India's historical approach to cryptocurrency regulation has been inconsistent, creating uncertainty for the market.
The RBI is actively exploring the development of a CBDC as an alternative to private cryptocurrencies.
The regulation of Bitcoin could have significant implications for the Indian economy and its integration into the global digital landscape.

The journey toward regulating Bitcoin in India is far from over.As the government navigates this complex landscape, it is crucial to engage in open dialogue with stakeholders, learn from the experiences of other countries, and prioritize the protection of investors while fostering innovation.The coming months will be decisive in determining the future of Bitcoin and the broader cryptocurrency ecosystem in India.The government must act decisively, considering the potential benefits and risks, to create a clear and sustainable regulatory environment.Are you ready for the future of crypto in India?