India’s Stance on Cryptocurrency Regulation Amid Economic Uncertainty
In recent news, it has been stated that India currently has no immediate plans to regulate cryptocurrency sales and purchases. The Ministry of Finance has made it clear that they are assessing the risks and benefits of cryptocurrencies with the aim of implementing a policy by September 2024.
GM Harish Balayogi, a member of the Lok Sabha, raised questions about the laws surrounding virtual digital assets (VDAs) in the country. In response, Pankaj Chaudhary, the Minister of State for Finance, stated that the government does not collect data on cryptocurrencies and that they remain unregulated in India. He emphasized that there is no proposal at the moment to introduce laws to control the buying and selling of virtual digital assets.
Although there is currently no regulation in place, the government is actively evaluating the risks associated with cryptocurrencies. The Financial Intelligence Unit India (FIU-IND) has been given the authority to designate Virtual Digital Asset Service Providers (VDSAPs) as Reporting Entities under the Prevention of Money Laundering Act, 2002 (PMLA) for specific oversight purposes such as anti-money laundering (AML) and counter-terrorism financing (CFT). Law Enforcement Agencies (LEAs) are also responsible for addressing illegal activities in accordance with existing laws.
Despite the lack of regulations, the Indian government is participating in global discussions on cryptocurrencies. India’s leadership in the G20 has led to the adoption of a roadmap on crypto assets, which will guide the country’s approach to regulating cryptocurrencies. Before any regulations are put in place, the government is carefully assessing the risks specific to India. A discussion paper outlining the government’s stance is expected to be released by September 2024.
It is important for Indian investors and cryptocurrency-related organizations to stay informed about any changes to the regulatory landscape and to work within the current frameworks. The e-rupee, India’s central bank’s digital currency, is gaining traction, with major payment companies like AmazonPay and GooglePay expressing interest in it.
As the government continues to evaluate the risks and benefits of cryptocurrencies, it is crucial for stakeholders to stay informed and engaged in the ongoing discussions surrounding cryptocurrency regulations in India. By staying updated on the latest developments, investors and organizations can navigate the evolving regulatory landscape more effectively.