India Economic Affairs Secretary Ajay Seth announced that the government of India is to release a discussion paper soon that outlines India’s policy approach to cryptocurrencies. Conducting a survey expected before September, this paper will seek opinions and sentiments of various stakeholders concerned with the proposed regulations in India’s Cryptocurrency.
The deliberation paper has been prepared by an inter-ministerial committee consisting of the Reserve Bank of India and the Securities and Exchange Board of India, which refers to the creation of cryptocurrency policy. Interestingly, the paper shall also discuss the extent of the regulations concerning cryptocurrencies to encompass a wider area of looking into AML and CTF provisions.
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Stakeholder Engagement and Industry Reactions
Due to this move, more attention has been drawn to the Indian crypto market. The founder of CoinDCX, Sumit Gupta, said the government’s decision to release a consultation paper is very pleasing, adding that the Web3 industry is gradually developing and is highly dynamic. This consultation paper was released after the Indian government failed to mention crypto in the Union Budget 2024/2025, bringing uncertainty to the Indian crypto populace and the current tax structure. This latest development serves to give a better direction on the issues of the regulation.
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India’s move to include crypto assets and intermediaries within the ambit of AML and CTF norms in March 2023 has been effectively succeeded by the government’s release of a consultation paper on the regulation of cryptocurrencies. Some of the issues that the discussion paper is likely to address include rules laid down by politico-economic organizations such as the IMF and the FSB. These guidelines were endorsed by G20 member countries during India’s presidency last year, with the IMF-FSB synthesis paper cautioning against a blanket ban on crypto activity, citing enforcement difficulties.
In conclusion, releasing the discussion paper on cryptocurrency regulations marks a significant step towards a comprehensive policy framework in India. Stakeholder feedback will be crucial in shaping the final rules, ensuring that the interests of the crypto community are considered. As the government prepares to launch this consultation process, the Indian crypto community will closely monitor developments, hoping for a balanced and forward-looking regulatory environment.
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Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.