You can see the rules and regulations in other jurisdictions.
Because there are no specific regulations governing blockchain technologies and cryptocurrencies in India, they operate in a realm of legal uncertainty. RBI issued a circular in 2018 directing regulated entities not to deal in virtual currencies, nor to provide services to facilitate, deal with or settle virtual currencies, nor to enter into relationships where such services were already provided. On constitutional grounds of proportionality, the Supreme Court of India struck down this circular in 2020, stating that the RBI has consistently maintained its position that virtual currencies have not been banned, and that it has failed to demonstrate that regulated entities have suffered any losses as a result of their interactions with virtual currency exchanges. In its decision, the Supreme Court did not provide an opinion on whether virtual currencies should be prohibited or not, and instead left that for regulators and Parliament to decide. Despite this ruling, banks continued to refer to the RBI circular with warnings about trading in virtual coins. But the RBI soon cleared things up by allowing banks (including payment system providers and NBFCs) to keep facilitating trade in these digital assets, as long as they complied with existing regulations and instructions.1
The money laundering regulatory framework has yet to be applied to cryptocurrencies. The industry has established a code of conduct that focuses on anti-money laundering regulations. This code is being reassessed in light of heightened monitoring of the sector by governing bodies and enforcement agencies due to purported cases of money laundering. As the Reserve Bank of India has not validated cryptocurrency as official currency, it is challenging to determine if crypto activity would be classified as a capital account or current account transaction under current rule.1
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