A panel headed by the Secretary of the Department of Economic Affairs (DEA) is set to release a consultation paper on cryptocurrency regulation, with publication expected between September and October, according to sources from CNBC-TV18. This marks a pivotal moment in India’s efforts to shape the future of digital currencies.
The paper will solicit stakeholder comments on the regulatory framework for crypto assets, a crucial step toward establishing a comprehensive policy in the country. Finance Minister Nirmala Sitharaman emphasized the importance of global consensus on cryptocurrency regulation, stating in October 2023 that the G20 nations have adopted a unified approach.
“With the global alignment on regulatory measures, each country will need to craft its legislative framework while working in concert with other nations,” Sitharaman said.
Economic Affairs Secretary Ajay Seth echoed these sentiments in September 2023, highlighting the need to carefully consider the G20’s recommendations before formulating national policies. He pointed out that the G20 has acknowledged the higher risks associated with cryptocurrencies, especially for emerging economies, and has laid out foundational principles for effective regulation.
India has already taken steps to curb illegal activities in the crypto space, banning nine offshore Virtual Digital Assets (VDA) service providers, including Binance, for violating the Prevention of Money Laundering Act (PMLA) of 2002. Despite this setback, Binance managed to rebuild its operations in India by registering with the Financial Intelligence Unit in December 2023.
This upcoming consultation paper represents a significant development in India’s journey toward establishing a clear regulatory framework for cryptocurrencies, aligning with global efforts to address the challenges and opportunities posed by digital assets.
