India reexamines its cryptocurrency position as global regulatory attitudes evolve, potentially delaying its long-awaited discussion paper.
India Reviews Crypto Policy Amid Changing Global Landscape
India is reconsidering its stance on cryptocurrencies in response to evolving global policies, a senior government official revealed. The reassessment follows crypto-friendly moves by several nations, including the United States, and could delay the country’s long-anticipated discussion paper on digital assets.
Global Crypto Trends Influence India’s Approach
Economic Affairs Secretary Ajay Seth confirmed that India is revisiting its crypto framework due to shifting international perspectives. “More than one or two jurisdictions have changed their stance toward cryptocurrency in terms of usage and acceptance,” he stated. Given the borderless nature of digital assets, Seth emphasized that India’s policy cannot be unilateral.
Trump’s Crypto Policies Add Pressure
While Seth did not mention the United States specifically, his comments align with recent developments in U.S. crypto regulation. Former President Donald Trump recently ordered the formation of a cryptocurrency working group to draft new policies and consider a national crypto stockpile, signaling a pro-crypto shift in the U.S.
India’s Strict Crypto Regulations and High Taxes
Despite India’s tough regulatory stance and high trading taxes, cryptocurrency adoption has surged. The Financial Intelligence Unit (FIU) has actively enforced compliance, issuing show-cause notices to nine offshore crypto exchanges in December 2023 for failing to meet local regulatory requirements.
Binance Penalized for Non-Compliance
Binance, the world’s largest crypto exchange, faced a ₹188.2 million ($2.25 million) fine in June 2024, following its registration with the FIU. The penalty highlights India’s strict enforcement measures, despite growing domestic interest in crypto investments.
Regulators Split Over Crypto Policy
India’s market watchdog previously recommended that multiple regulators oversee crypto trading, indicating some openness to private digital assets. However, the Reserve Bank of India (RBI) has consistently warned that private cryptocurrencies pose macroeconomic risks, maintaining a cautious stance on their widespread use.
India’s Crypto Future Remains Uncertain
With global policies evolving, India’s crypto framework remains under review. While some regulators advocate for a balanced approach, concerns from the RBI and strict taxation laws continue to pose challenges for crypto adoption in the country.
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