India to Release Its Crypto Policy Stance by September After Stakeholder Consultations: Report

India plans to release a discussion paper outlining its policy stance on cryptocurrencies by September, according to Senior Finance Ministry Official Ajay Seth.

Seth said in September 2023 that India will analyze and decide its own position on cryptocurrencies “in the coming months.”

India plans to release a discussion paper outlining its policy stance on cryptocurrencies before September, Indian news agency Moneycontrol reported, citing an interview with Economic Affairs Minister Ajay Seth.

Seth’s interview does not suggest a commitment to regulating cryptocurrencies through comprehensive legislation, but instead suggests a consensus-based stance from stakeholders on the issue.

“The policy stance is how to consult with relevant stakeholders, so come out openly and say, here’s a discussion paper, these are the issues and then stakeholders will give their views,” Economic Affairs Minister Seth said. “Right now, an inter-ministerial group is looking into a broader policy for cryptocurrencies. We hope to release the discussion paper before September.”

The inter-ministerial group includes India’s central bank, the Reserve Bank of India (RBI), and market regulator the Securities and Exchange Board of India (SEBI). The RBI has opposed legitimising crypto or stablecoins, instead seeking to ban them because it argues that digital assets pose macroeconomic stability risks to developing countries. SEBI has not opposed regulating digital assets and recently said that oversight of cryptocurrency trading should be given to various authorities.

India lacks comprehensive crypto legislation but has imposed harsh taxes on the sector. However, it has introduced a requirement for crypto assets to register with the country’s Financial Intelligence Unit (FIU-IND) to comply with anti-money laundering (AML) and terrorist financing standards set by global bodies such as the Financial Action Task Force (FATF), marking a shift in credibility for the sector.

“In India, (cryptocurrencies) are regulated only from an AML and EFT (Electronic Fund Transfer) perspective. Regulation starts and ends there, it cannot go beyond that, so should there be more jurisdiction? What should be the policy stance? All of these will come out in the discussion paper,” Seth said, according to the report.

In September 2023, Seth said that India would analyze and decide on its own position on crypto “in the coming months” after assessing the stance of global leaders on an acceptable crypto rule framework. This statement came during India’s presidency of the G20, where it prioritized a consensus-based framework of global crypto rules.

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