This is when India plans to submit a discussion paper on cryptography

While Indian crypto users received no relief from draconian tax rules in the country’s 2024-2025 budget, a “discussion paper” outlining its policy position on the industry could be released before September of this year

The main purpose of the discussion paper is to gather input from relevant stakeholders on the ideas described in it.

India Cryptography Discussion Paper

In an interview with Moneycontrol, India’s Economic Affairs Secretary Ajay Seth said the discussion paper will include suggestions on how to regulate cryptocurrencies in India, which is currently only covered by anti-money laundering laws (AML) and Electronic Funds Transfer (EFT).

Other important areas of focus will be to explore whether the scope of regulation should be expanded and what the policy position should be.

An inter-ministerial group, which includes members of the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), is developing a broader policy on cryptocurrencies. The discussion paper is expected to be ready by September.

Seth was quoted as saying:

“The policy position is how you consult the relevant stakeholders, so it’s about coming out in the open and saying here’s a discussion paper, these are the issues, and then the stakeholders will give their views.”

India’s plan to release a discussion paper responds to G20 countries’ support for International Monetary Fund (IMF) and Financial Stability Board (FSB) guidelines during India’s G20 chairmanship last year. The IMF-FSB briefing paper advised against a hostile approach, such as a total ban on cryptographic activities, highlighting the difficulties in enforcing such a measure.

In a statement to CryptoPotato, CoinDCX co-founder Sumit Gupta said he is optimistic about the Indian government’s move to establish an inter-ministerial group to review and publish a consultation paper. The executive added:

“This initiative is an important step towards shaping the future of the dynamic and rapidly evolving Web3 industry in India. As key stakeholders in this sector, we urge the government to actively seek input from domestic companies. Working with local businesses will ensure that the regulatory framework is robust, inclusive and supportive of innovation.”

No tax relief for Indian crypto investors

While India does not have a comprehensive crypto regulatory framework, it requires crypto entities to register with the Financial Intelligence Unit (FIU-IND) to meet anti-money laundering (AML) standards and the financing of terrorism established by international organizations such as Financial Action. Working group (FATF).

This move was an important boost of credibility for the sector. However, the existing tax system has been extremely controversial as it imposes a 30% tax on cryptocurrency earnings and a 1% tax deducted at source (TDS) on transfers of crypto assets, which raised concerns among investors and industry professionals regarding its effects on the country’s cryptocurrency. market

In another setback for the Indian crypto sector, investors’ hopes were dashed when Finance Minister Nirmala Sitharaman made no changes to existing cryptocurrency tax regulations in her 2024-25 budget speech.

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