India to Announce New Crypto Policy by September
India will release its cryptocurrency policy by September, seeking input from stakeholders to shape regulations and address economic stability concerns.
India is set to announce its cryptocurrency policy stance by September after consulting key stakeholders, according to Economic Affairs Secretary Ajay Seth. This policy will be developed through an inclusive process, where a discussion paper will outline main issues and seek feedback from various parties.
Seth emphasized the policy will be shaped by stakeholder consensus rather than comprehensive regulation. He mentioned, "The policy stance is how does one consult relevant stakeholders, so it is to come out in the open and say here is a discussion paper, these are the issues, and then stakeholders will give their views." An inter-ministerial group, including the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), is working on this, aiming to release the discussion paper before September.
The RBI has been wary of legitimizing cryptocurrencies due to concerns over economic stability, preferring to ban them. In contrast, SEBI supports regulating digital assets and suggests multiple authorities oversee cryptocurrency trading.
India's current cryptocurrency regulations are limited. The government has imposed high taxes and requires crypto entities to register with the Financial Intelligence Unit (FIU-IND) to meet global anti-money laundering (AML) and counter-terrorism financing standards, enhancing the industry's credibility.
Seth stated that India's crypto regulations focus on AML and electronic funds transfer (EFT). He questioned if the regulatory scope should be expanded, which will be explored in the discussion paper. "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," he said.
This discussion paper follows Seth's promise in September 2023 to analyze and decide India’s position on cryptocurrencies, considering global leaders' stances. This commitment aligns with India's presidency of the Group of 20 (G20), prioritizing a consensus-based approach to global crypto rules.
The discussion paper is expected to cover several crucial issues, including broader regulatory scopes and the roles of various regulatory bodies. By gathering comprehensive input, India aims to create a balanced framework addressing digital assets' risks while fostering innovation and growth.
In summary, India’s upcoming cryptocurrency policy stance signifies a major step. By involving multiple regulatory bodies and adhering to international standards, India seeks to ensure stability and growth in the digital asset sector. The discussion paper will be a critical part of defining India's future approach to cryptocurrencies.
