REGULATING CRYPTOCURRENCY IN INDIA: BALANCING INNOVATION AND FINANCIAL SECURITY

AUTHOR – RISHI AJMERA, STUDENT AT CHRIST DEEMED TO BE UNIVERSITY

BEST CITATION – RISHI AJMERA, REGULATING CRYPTOCURRENCY IN INDIA: BALANCING INNOVATION AND FINANCIAL SECURITY, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (1) OF 2026, PG.1065-1073, APIS – 3920 – 0001 & ISSN – 2583-2344. DOI – https://doi.org/10.65393/VDCQ9601

Abstract

The advent of digital currencies has brought with it very significant implications for India’s financial regulatory landscape, most notably how to strike a balance between technological innovation and financial security and stability. Indian financial legislation, based on a number of statutes such as the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949, and the Prevention of Money Laundering Act, 2002, does not explicitly define “cryptocurrency” as a valid financial instrument. More recent events, such as taxation measures under the Finance Act, 2022, and RBI advisories, reiterate the policy of regulatory restraint while placing cryptocurrencies in the realm of a legal grey area. This essay argues that Indian financial law needs an integrated framework that understands the dual character of cryptocurrency as a new technology as well as a prospective financial threat. It promotes transparent regulatory frameworks that safeguard consumers and financial stability while supporting technological development and financial inclusion.

Keywords: Cryptocurrency Regulation, Financial Innovation, Digital Assets, CBDC, Financial Security, Regulatory Framework.