Regulation
Cryptocurrency Policy Discussion Paper by September
India is all set to roll out its crypto policy! India is planning to release a major discussion paper on its crypto policy by September. The paper will outline the country’s stance on digital assets and seek stakeholder feedback to shape future regulatory measures. So far, there is no law and crypto enthusiasts are expecting more lenient rules on cryptocurrencies. Learning from Hong Kong, Dubai, and Singapore on regulation, will India be able to tap into this multi-million dollar industry?
Role of the Interministerial Group
According to reportAjay Seth, Economic Affairs Secretary, said the discussion paper will outline key issues related to cryptocurrencies and invite stakeholders to contribute to it. This approach is aimed at fostering broad consensus rather than implementing comprehensive legislation immediately.
An inter-ministerial group is behind the policy formulation, comprising members from the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). The RBI has expressed reservations about legitimising cryptocurrencies due to concerns about risks to macroeconomic stability. On the other hand, SEBI is open to regulating digital assets and believes that oversight should be done by multiple authorities.
Key points
The key point here is that last year in September, Mr Seth said that India would decide its position on cryptocurrency in “the coming months”. It has been almost 10 months since that happened. It is important to note that Seth’s latest interview does not suggest a commitment to regulate cryptocurrency through comprehensive legislation, but rather a position based on stakeholder consensus on the issue.
This means that if the RBI and other opposing stakeholders win the consensus-building efforts, India’s crypto policy stance will remain unchanged and no legislation will enter the parliament.
Current regulatory scenario
Currently, India does not have a comprehensive cryptocurrency regulation. The existing framework focuses on anti-money laundering (AML) and electronic funds transfer (EFT) compliance. Crypto entities are required to register with the Financial Intelligence Unit (FIU-IND) to adhere to international standards set by bodies like the Financial Action Task Force (FATF).
After that ?
The discussion paper will examine whether additional regulatory measures are required beyond the current anti-money laundering and counter-terrorist financing requirements. Seth mentioned that India is considering global perspectives on cryptocurrency regulation, especially in light of its presidency of the Group of 20 (G20), which has emphasized consensus-based global cryptocurrency rules.
This move is expected to provide clearer guidelines for the cryptocurrency sector in India and reflect a more informed and balanced approach to regulating digital assets.
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