India’s Economic Affairs Secretary, Ajay Seth, has announced that the country will release a discussion paper outlining its policy stance on cryptocurrencies before September. The paper aims to gather comments and views from relevant stakeholders on proposed cryptocurrency regulations in India.
The discussion paper results from the efforts of an inter-ministerial group, including the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), to develop a comprehensive cryptocurrency policy.
Notably, the paper will explore the remit of regulations for cryptocurrencies, going beyond the current framework of anti-money laundering (AML) and counter-terror financing (CTF) standards.
This move has attracted attention from the Indian crypto community. Sumit Gupta, founder of CoinDCX, expressed his pleasure at the government’s decision to release a consultation paper, stating, “We are pleased to note that the Web3 industry is evolving quickly and is very dynamic.” He also urged the government to consult with local crypto businesses before proposing any rules.
Through media reports, we understand that the Government of India, has constituted an Inter-ministerial Group to review and release a consultation paper on Crypto regulation.
We are pleased to note that! The #Web3 industry is evolving quickly and is very dynamic.
We take… pic.twitter.com/Pr02BoRTgT
— Sumit Gupta (CoinDCX) (@smtgpt) July 25, 2024
This latest development comes shortly after the government omitted any mention of cryptocurrencies in the Union Budget 2024/2025, leaving the Indian crypto community uncertain about the future of crypto assets and the existing tax regime.
The government’s decision to release a consultation paper on crypto regulation follows India’s extension of AML and CTF standards to crypto assets and intermediaries in March 2023. The discussion paper is expected to consider the guidelines set forth by the International Monetary Fund (IMF) and the Financial Stability Board (FSB), which were endorsed by G20 member countries during India’s presidency last year. The IMF-FSB synthesis paper had cautioned against a blanket ban on crypto activity, citing enforcement difficulties.
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