Madras High Court Declares Cryptocurrency as Property Under Indian Law

The Madras High Court has ruled that cryptocurrency qualifies as property under Indian law. The judgment was delivered by Justice N. Anand Venkatesh, who stated that while cryptocurrencies are neither physical objects nor legal tender, they possess the essential characteristics of property.

Key Observations by the Court

• Justice Venkatesh noted:
  • “Cryptocurrency is a property. It is not a tangible property nor is it a currency. However, it is a property capable of being enjoyed and possessed (in a beneficial form).”
  • Cryptocurrencies are identifiable, transferable, and exclusively controlled through private keys, which makes them a form of property that can even be held in trust.

Legal Recognition

• The Court cited Section 2(47A) of the Income Tax Act, 1961, which classifies cryptocurrencies as “virtual digital assets.”
• This provides statutory recognition for treating digital currencies as assets with measurable value.

Clarification on RBI’s Position

• The Court clarified that the Reserve Bank of India (RBI) has not banned virtual currencies.
• Instead, the RBI had restricted banks and financial institutions from facilitating cryptocurrency trade, rather than prohibiting ownership or possession itself.

Source: FE