India’s Ambiguous Crypto Policy: Time for Worldwide Unity

In a recent statement to the Lok Sabha, the Indian government stated that there is no fixed timeline for the implementation of comprehensive regulatory rules for virtual assets.

The government’s response follows questions from two MPs about what steps have been taken to create a structured regulatory framework and an expected timeline for such regulations.

Management has maintained that policy efforts on VDA are needed globally to avoid regulatory arbitrage towards ANI, although it has stated that it has consulted both formally and informally with industry stakeholders and relevant international organisations. India wants effective regulation of borderless crypto assets to emerge only through deep international cooperation.

BREAKING NEWS: 🇮🇳 Crypto regulation was discussed in parliament: 🧵

1⃣ Comprehensive Framework: The government is working on a regulatory framework for VDAs but emphasizes the need for international cooperation to address their unrestricted nature and avoid regulatory arbitrage. pic.twitter.com/Njlvw48Urj

— Crypto India (@CryptooIndia) December 16, 2024

Since taxation on VDA-related income already exists, with VDA transactions falling under the Anti-Money Laundering Act since March 2023, the government said crypto assets are unlimited and therefore require international cooperation to prevent regulatory arbitrage. The adoption of the “G20 Roadmap on Crypto Assets” during India’s G20 Presidency has highlighted the urgent need for collaborative action at the global level, while encouraging all jurisdictions, especially emerging economies, to develop risk-sensitive regulations.

But as India moves towards economic strength and financial stability, as well as innovation and investor protection, challenges remain. Given that VDAs cross borders, an investor protection framework appears incomplete without strong international cooperation. As the shifting global consensus on how to regulate digital assets continues to take shape, alongside policies based on national interest, a clear regulatory timeline leaves market participants with clarity to cope.

These latest developments support a growing vulnerability in India’s rapidly changing crypto sector. While it leads many countries in grassroots adoption of digital assets, its popularity has also placed it at the top of the list for many scammers.

The Andhra Pradesh scam, the latest in a string of high-profile crypto-related scams, fits a pattern that has emerged elsewhere in India this year, where the lure of attractive monthly returns and totals framed as tied to reputable exchanges has brought investors here. to elaborate businesses of all origins.