India is revisiting its cryptocurrency policy as global sentiment toward digital assets continues to evolve, with countries like the US adopting a more structured regulatory stance.
According to Reuters, the Indian government is reassessing a discussion paper on cryptocurrencies initially set for release in September 2024.
Economic Affairs Secretary Ajay Seth highlighted the borderless nature of digital assets, indicating that India must avoid unilateral actions. This approach reflects the government’s intention to examine international regulatory frameworks before determining its position.
The policy review follows President Trump’s executive order on digital assets, establishing a regulatory framework to promote innovation. Meanwhile, India is adopting a more cautious approach to align with international regulatory standards.
“More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of the usage, their acceptance,”
Seth noted.
“In that stride, we are having a look at the discussion paper once again.”
Despite this reassessment, the Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, did not mention cryptocurrencies directly but introduced stricter tax regulations for cryptocurrency trading, reflecting the government’s cautious stance on the industry.
A Business Today report indicates that a panel led by the Secretary of the Department of Economic Affairs (DEA) in India is set to release a crypto consultation paper by March 2025. This paper aims to collect stakeholder feedback to help create a comprehensive regulatory framework for virtual digital assets (VDAs).
The Reserve Bank of India (RBI) has also expressed concerns about the risks of cryptocurrencies, especially stablecoins, in its 2024 Financial Stability Report. The RBI warned that unregulated digital assets could undermine monetary control, enable capital flight, and divert resources from the real economy. It highlighted stablecoins as a significant concern due to their potential for financial runs. It noted that their issuers hold large amounts of mainstream assets like government securities, which could threaten economic stability.
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