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An exclusive panel within the DEA is responsible for drafting this paper, which is expected to be available between September and October 2024.
The Indian government is set to release a consultation paper on crypto regulations by October 2024, marking a significant step in shaping the country’s crypto landscape. The Department of Economic Affairs (DEA) is leading this effort, seeking input from industry experts and stakeholders to clarify the regulatory framework for digital assets.
An exclusive panel within the DEA is responsible for drafting this paper, which is expected to be available between September and October 2024. This document will be a crucial element in the government’s broader strategy to tackle the regulatory challenges in the fast-growing crypto sector. The sector has expanded rapidly, yet it remains largely unregulated, making this move essential for bringing clarity.
Earlier this year, India’s Ministry of Finance stated that there are no immediate plans to regulate crypto sales. However, anti-money laundering (AML) regulations already govern Virtual Digital Asset Service Providers (VDASPs). This approach reflects the government’s cautious but forward-looking strategy in integrating crypto assets into the financial system while ensuring security.
India’s Crypto Stance Evolves with G20
Global developments have strongly influenced India’s position on crypto regulation. Last year, the Financial Stability Board (FSB) integrated crypto-related policy recommendations into the G20 roadmap, marking a global effort for consistent regulatory standards. As the G20 president, India has actively engaged in these discussions, highlighting the need for international cooperation to tackle the challenges and risks of crypto assets.
Finance Minister Nirmala Sitharaman has stressed the need to consider country-specific risks and characteristics before implementing regulations. This approach ensures that India’s regulatory framework remains globally aligned while addressing domestic concerns.
India’s cryptocurrency regulation is evolving, showing a readiness to engage with the growing significance of digital assets. The Reserve Bank of India (RBI) has traditionally been cautious, viewing crypto assets as speculative and lacking intrinsic value. However, recent government actions indicate a move toward a more balanced approach, acknowledging the potential benefits of a well-regulated crypto environment.
Consultations Lead to Policy Progress
The Indian crypto industry has welcomed the government’s openness to consulting with stakeholders. Saravanan Pandian, CEO of KoinBX crypto exchange, emphasized the potential for positive shifts in India’s crypto policy. He noted that the government’s engagement with industry participants marks progress.
This development gains significance in the context of Prime Minister Narendra Modi’s call for a global framework on virtual assets at the B20 Summit India 2023. His remarks showed India’s commitment to contributing to global discussions on crypto regulation and aligning its policies with international standards.
As India nears the finalization of its crypto regulatory framework, the results of this consultation will be pivotal in shaping the future of the crypto industry in the country. The government’s ability to balance innovation with risk management will be essential in creating a dynamic and secure crypto environment in India.
