India’s much-awaited discussion paper on cryptocurrencies has been delayed due to the government’s current priorities taking precedence over the publication. The paper, which was initially scheduled to be released by September, aimed to outline India’s policy stance on cryptocurrencies after consultations with various stakeholders, including the central bank and the markets regulator.
However, according to sources familiar with the decision, officials are currently focusing on other pressing matters such as the upcoming World Bank meetings and other international engagements. While the intention to publish the discussion paper still stands, there is no set timeline for its release at the moment.
India, as the world’s fifth-largest economy, lacks comprehensive legislation regarding cryptocurrencies. Despite being considered unregulated, the country has imposed heavy taxes on the sector and mandated that crypto entities register with the Financial Intelligence Unit to comply with anti-money laundering and terrorism financing standards established by global organizations like the FATF.
The government’s attention has been diverted to various urgent issues, including the upcoming IMF and World Bank meetings later this month, as well as ongoing regional conflicts such as the wars in Ukraine and the Middle East. Additionally, with the election year approaching, the Finance Ministry is preoccupied with preparing two budgets – an interim budget in February before the July elections and a full budget thereafter – along with conducting consultations nationwide.
Although there have been recent security concerns such as the $234 million hack of Indian cryptocurrency exchange WazirX, authorities do not view cryptocurrency regulation as a top priority compared to two years ago. The delay in releasing the discussion paper reflects the government’s current focus on more immediate and critical matters.
In conclusion, while the crypto community eagerly awaits India’s official stance on cryptocurrencies, it seems that the government’s attention is currently directed towards other urgent priorities. The delay in publishing the discussion paper underscores the complex challenges and competing demands that officials are currently facing in the country’s policy environment.