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India crypto policy is to publish a cryptocurrency discussion paper by the end of 2024.
By the end of 2024, Indian authorities will put out a discussion paper on how the country feels about cryptocurrencies. With this move, the country is taking a big step toward changing the India crypto policy plan.
In a recent interview, Secretary of Economic Affairs Ajay Seth said that the upcoming discussion paper would make the government’s stance on cryptocurrencies clearer and ask interested parties for their input. The goal of this project is to get important people involved in making the India crypto policy, which will help solve the worries and hopes of one of the world’s most populous countries.
In India it (cryptocurrencies) is being regulated from the perspective of AML and EFT alone. Regulation starts and ends there, it cannot be beyond that, so should the remit be more? What should be the policy stance? All that will come out in the discussion paper.
Ajay Seth, secretary of Economic Affairs
An inter-ministerial group made up of various agencies is currently writing the India crypto policy discussion paper. Seth says that this group is looking into a “wider policy for cryptocurrencies.” The paper, which will likely come out before September, will give a full picture of possible regulatory frameworks and the country’s long-term goals in this area.
Divergent views on India crypto policy regulation: RBI’s ban proposal vs. SEBI’s multi-agency approach
The central bank of India, the Reserve Bank of India (RBI), and the market regulator, the Securities and Exchange Board of India (SEBI), are both in the group. The RBI has always been against the use of cryptocurrencies, saying that they could hurt the security of the economy. The central bank wants to ban all cryptocurrencies because they see them as a threat rather than a chance.
On the other hand, SEBI has taken a more positive stance. SEBI stated in May 2024 that India should use a multi-agency approach to cryptocurrency laws. Plans to give oversight duties to different groups, like the Insurance Regulatory and Development Authority of India, were part of the ideas that were shown to an advisory panel. This method tries to make a fair set of rules that can work with how constantly changing cryptocurrencies are.
Seth also talked about a report that the Financial Stability Board (FSB) and the International Monetary Fund (IMF) put out in July 2023. It said that digital currencies shouldn’t be banned completely. The G20 countries’ finance ministers and central bank directors, including India, approved of this idea in October. This IMF-FSB framework could be used as a guide when writing India’s policy paper, giving the country’s regulatory attempts a bigger picture.
Gupta advocates for local involvement
Sumit Gupta, who helped to create the Indian cryptocurrency market CoinDCX, liked the move. He stressed how important it was for local businesses to be involved in the rule-making process. “As important players in this field, we urge the government to actively seek input from businesses in this country.” “Working with local businesses will make sure that the regulatory framework is strong, open to everyone, and open to new ideas,” Gupta said.
India does not yet have a formal regulatory system for cryptocurrencies. That being said, the government has put a 30% tax on cryptocurrency income and taken a 1% tax at the source. Even with these steps, regulators are keeping a closer eye on the business.
The Financial Intelligence Unit of India required crypto service companies in the country to get licenses earlier this year. This caused a number of offshore cryptocurrency exchanges to be blocked, showing that the government is serious about keeping an eye on and controlling cryptocurrency operations within its borders.
The discussion paper’s release is an important step toward creating a clear and organized India crypto policy. It shows that the government understands how important digital currencies are becoming and how important it is to find a balance between new ideas and keeping the economy safe and stable.
