India is reportedly set to change its stance on cryptocurrency trade and investment in the country, according to a report by Reuters.
India is reportedly set to reconsider its stance on cryptocurrency trade and investment in the country, following a global shift in approach toward the digital currency. The move comes amid increasing pressure on India to clarify its stance on crypto assets.
In recent months, the US has taken a more pro-crypto approach, with former President Donald Trump even launching his own meme coin in the US. The move led to a surge in crypto prices, with Bitcoin hitting an all-time high of $100,000 just ahead of Trump's swearing in as the US president.
According to a report by Reuters, the government is now rethinking its current approach to cryptocurrency in India. “More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of usage, acceptance, and the importance of crypto assets. In that stride, we are reviewing the discussion paper once again,” the news agency quoted India's Economic Affairs Secretary Ajay Seth as saying.
In the US, Trump has recently directed the establishment of a cryptocurrency working group, which will suggest new digital asset regulations and help in creating a national cryptocurrency reserve.
Meanwhile, regulatory bodies in India have been cracking down on crypto exchanges over non-compliance with local regulations. In December 2023, the Financial Intelligence Unit (FIU) in India issued show-cause notices to nine offshore crypto exchanges, including Binance and Kucoin, for non-compliance. The FIU also requested the Ministry of Electronics and Information Technology to block these platforms’ URLs within India.
In June 2024, Binance, which is the world's largest crypto exchange, faced a hefty fine of Rs 188.2 million in India. This came just a month after Binance registered with the FIU in an attempt to resume its operations in the country. The fine, according to FIU, was due to violations of the Prevention of Money Laundering Act (PMLA), 2002, under which virtual digital asset service providers (VDA SPs) are required to register as 'Reporting Entities' and comply with anti-money laundering protocols.
In 2023, former RBI Governor Shaktikanta Das also represented a critical stand against cryptocurrency in India. “Crypto should be banned, given its lack of underlying value. It’s a form of gambling, nothing more than 100 per cent speculation,” Das said at the Business Today Banking and Economy Summit.
There have been calls for a multi-regulatory framework for crypto in India. The report on the shift in the government’s stance regarding the digital currency brings hope for traders in India. It will be interesting to see how the government now balances the external pressure from global developments and the internal squabble on regulation around cryptocurrency.
