Article summary
Abstract
The emergence of blockchain and cryptocurrencies in the aftermath of the 2008 global
financial crisis has fundamentally challenged traditional models of money, financial
intermediation, and state regulatory authority. This paper examines the evolution of
cryptocurrency and blockchain technology with particular emphasis on India’s rapidly
developing yet fragmented legal and regulatory framework. It analyses the
constitutional and statutory dimensions of virtual digital assets, including the Reserve
Bank of India’s regulatory approach, the Supreme Court’s intervention in Internet and
Mobile Association of India v. RBI, taxation of Virtual Digital Assets under the Finance
Act, 2022, application of the Prevention of Money Laundering Act to crypto service
providers, and the emergence of the Digital Rupee as a Central Bank Digital Currency.
The study further explores the broader social applications of blockchain in financial
inclusion, digital identity, remittances, humanitarian assistance, and climate finance,
while addressing concerns relating to volatility, fraud, energy consumption, money
laundering, and regulatory fragmentation. Particular attention is given to the
constitutional tension between Article 19(1)(g), financial stability, state sovereignty,
and technological innovation. The paper argues that India’s present approach reflects
a regulatory paradox in which cryptocurrencies are taxed and monitored without a
comprehensive dedicated legal framework. It concludes that a balanced, transparent,
and proportionate regulatory regime is essential to reconcile innovation, consumer
protection, financial security, and constitutional freedoms in India’s evolving digital
economy.