As a seasoned researcher with a keen interest in the dynamic world of finance and technology, I find myself intrigued by India’s stance on cryptocurrency regulation. Having closely followed the tumultuous journey of digital assets in the country, it seems that India continues to walk a fine line between control and acceptance.
In simpler terms, it’s been stated by India’s Ministry of Finance that they currently have no intentions of imposing regulations on cryptocurrency transactions. This confirmation was made by Pankaj Chaudhary, the Minister of State for Finance, in a written response to the Lok Sabha, which is the lower house of India’s two-chamber legislature.
As an analyst, I can confirm that my recent written response addressed the queries posed by Honorable Member GM Harish Balayogi in Parliament. These questions aimed to clarify various aspects, such as whether our government has conducted any investigations regarding the standing of cryptocurrencies within our nation, and if so, whether we possess a comprehensive valuation of all digital assets owned by Indian citizens.
As an analyst, I too delved into understanding whether our nation has any proposed regulations regarding cryptocurrency transactions, and if so, who will be the oversight body entrusted with overseeing these digital assets within our borders.
Chaudhary explained that, as cryptocurrencies aren’t regulated in India, the government doesn’t gather any related data from them. (Informal translation: Chaudhary stated that since cryptocurrencies aren’t controlled in India, the government can’t collect information on them.)
At present, we don’t have any plans underway to create laws that govern the buying and selling of digital assets like cryptocurrencies within our nation.
Existing Laws Regulate Crypto in India
In simpler terms, the Minister of State for Finance stated that certain current entities have supervisory roles regarding cryptocurrencies.
To ensure careful monitoring for purposes like Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT), the Financial Intelligence Unit India (FIU-IND) has been given the authority to categorize Virtual Digital Asset Service Providers (VDSAPs) as entities required to report (Reporting Entities or RE) under the Prevention of Money Laundering Act, 2002 (PMLA).
Chaudhry pointed out that current laws grant sufficient power to law enforcement bodies to tackle illegal activities involving cryptocurrencies, which may be why there isn’t a unique law enforcement unit specifically dedicated to this field.
During his statement, the Minister of State for Finance indicated that during India’s G20 presidency last year, the country endorsed the “G20 Roadmap on Digital Assets” alongside a coordinated and comprehensive policy and regulatory framework outlined in an IMF-FSB Synthesis Paper. This paper addresses various risks associated with cryptocurrencies. Subsequently, each nation, including India, is expected to assess and address risks specific to their unique circumstances, while collaborating with relevant international bodies to implement additional measures.
In simpler terms, India hasn’t been very welcoming towards cryptocurrencies, and it once imposed a ban on financial institutions dealing with crypto-related business. This prohibition was issued in 2018 by the Reserve Bank of India (RBI), asking all financial institutions to cease offering services related to cryptocurrencies for individuals or businesses. However, fortunately for the industry, the Supreme Court overturned this ban in 2020, arguing that the RBI failed to provide sufficient proof of harm inflicted on regulated entities.
Lately, some cryptocurrency trading platforms in India, such as OKX, Kucoin, and Binance, have been barred due to suspected breaches of the nation’s anti-money laundering laws. In December, these exchanges received warnings from the authorities before the ban was enacted.
India has requested cryptocurrency exchange Binance to settle a Goods and Services Tax (GST) bill totaling approximately 7.22 billion rupees ($86 million), as per recent reports. The demand stems from the Directorate General of GST Intelligence (DGGI) who issued a notice pointing out fees that Binance collected on transactions made by Indians. It’s been speculated that Binance amassed around 40 billion rupees ($476.8 million) in transaction fees.
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2024-08-06 15:19