India is set to unveil a discussion paper detailing its stance on cryptocurrencies by September, as per Senior Finance Ministry Official Ajay Seth. The country aims to analyze and determine its position on crypto in the upcoming months, according to Seth.
The policy stance is centered around consulting relevant stakeholders and seeking their input before finalizing any regulations. The approach is to release a discussion paper highlighting the key issues and then gather feedback from stakeholders. This collaborative effort involves an inter-ministerial group, which includes the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).
While the RBI has been cautious about legitimizing cryptocurrencies due to potential risks to the country’s economic stability, SEBI has shown openness to regulating digital assets. Currently, India does not have a comprehensive crypto legislation, but it has imposed significant taxes on the industry. Additionally, crypto entities are now required to register with the Financial Intelligence Unit (FIU-IND) to comply with anti-money laundering and terrorism financing standards.
Seth emphasized that the regulation of cryptocurrencies in India is primarily focused on AML and EFT standards, but the discussion paper will explore whether the scope of regulation should be expanded. The policy stance will be shaped by the feedback received from stakeholders and will aim to strike a balance between regulatory oversight and industry growth.
Looking ahead, India plans to assess global leaders’ approaches to crypto regulation and incorporate those insights into its decision-making process. As the country holds the presidency of the Group of 20, it is prioritizing a consensus-based framework for global crypto rules.
In conclusion, India’s forthcoming discussion paper on cryptocurrencies reflects a collaborative and consultative approach to policy-making. By engaging with stakeholders and considering global best practices, the country aims to develop a regulatory framework that ensures financial integrity while fostering innovation in the crypto industry.