India Has No Plans to Regulate Cryptocurrency Transactions, Ministry of Finance States

GM Harish Balayogi, a member of the Lok Sabha, asked questions concerning the country's laws governing virtual digital assets (VDAs).

India does not currently have any plans to regulate cryptocurrency transactions, the Ministry of Finance has stated. Member of the Lok Sabha GM Harish Balayogi raised questions in the legislature regarding the country’s laws governing virtual digital assets (VDAs). Pankaj Chaudhary, the Minister of State for Finance, responded in writing to the questions.

Chaudhary stated that the government of India does not collect any data on cryptocurrencies, and that they remain largely unregulated in the country. He stated, “At present, there isn’t a proposal to introduce legislation in the country to regulate the buying and selling of virtual digital assets.”

Government Assesses Risks, crypto transactions to Continue Without Immediate Regulation

The Minister highlighted that the Financial Intelligence Unit India (FIU-IND) has been authorized to classify Virtual Digital Asset Service Providers (VDSAPs) as Reporting Entities under the Prevention of Money Laundering Act, 2002 (PMLA) for specific oversight purposes such as anti-money laundering (AML) and counter-terrorism financing (CFT). Law Enforcement Agencies (LEAs) are also tasked with addressing illegal activities in accordance with existing legal provisions.

Current laws empower law enforcement agencies, including regulators like the Reserve Bank of India, to take action against illegal conduct. Recent orders by the Directorate General of GST Intelligence for Binance to pay $86 million in unpaid taxes put a spotlight on continuing regulatory measures.

Despite the lack of regulations, the Indian government is participating in global discussions on cryptocurrencies. A holistic policy approach was enabled by India’s G20 leadership with the adoption of a roadmap on crypto assets. The government is assessing risks specific to the country before deciding on regulations. A discussion paper outlining the government’s position is set to be submitted by September 2024. India’s central bank digital currency, the e-rupee, is seeing expanding adoption, with major payment firms like AmazonPay and GooglePay showing keen interest.

Indian investors and businesses in the crypto sector are keeping a close watch on any shifts in the regulatory landscape, navigating the current frameworks.