The Indian government will release a public consultation paper on comprehensive cryptocurrency regulations between September and October 2024, according to a new report from CNBC.
The report revealed that a special panel, headed by the Secretary of the Department of Economic Affairs (DEA), will release the paper to gather input from industry experts and stakeholders on how to regulate crypto assets in the country.
CNBC indicated that this initiative is part of the government’s continued push to establish clear regulatory guidelines for the crypto sector.
The news follows recent remarks from a senior Indian Finance Ministry official, who confirmed no plans to introduce legislation regulating cryptocurrency transactions. Minister Pankaj Chaudhary had clarified that the Financial Intelligence Unit (FIU) already holds the authority to oversee critical areas like money laundering and terrorism financing. He also emphasised that law enforcement agencies are empowered to address illicit activities under current laws.
Chaudhary highlighted that under India’s leadership, the G20 agreed on a unified framework for regulating cryptocurrencies and addressing related risks, especially in developing countries.
Notably, India’s finance ministry has adopted a stricter approach towards cryptocurrency exchanges, with Binance being a primary focus. The exchange was among nine major foreign crypto platforms served with show-cause notices by the Financial Intelligence Unit (FIU) for allegedly operating illegally and failing to comply with anti-money laundering regulations in January 2024. Other affected exchanges include KuCoin, Kraken, and Huobi.
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Meanwhile, the Reserve Bank of India (RBI), the country’s central bank, have taken cautious stance. The RBI has consistently raised concerns over cryptocurrencies like Bitcoin, warning that they pose systemic risks to the financial system. P. Vasudevan, an executive director at the apex bank, reportedly stated during a panel session in Feburary 2024 that “Cryptocurrencies cannot be classified as currencies because they lack any inherent value.” He emphasized that it’s ultimately up to thegovernment to decide how to classify them..
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