Minister of State for Finance Pankaj Chaudhary said that India does not plan to control the cryptocurrency market any time soon. That was Chaudhary’s answer to GM Harish Balayogi, a member of parliament, who wanted to know more about the government’s position on cryptocurrencies.
Chaudhary said in a written response on August 5 that there is “no proposal” to regulate the “sales and purchase” of cryptocurrencies. The Indian constitution calls cryptocurrencies “virtual digital assets.”
Under the Prevention of Money Laundering Act (PMLA) of 2002, he said, the Financial Intelligence Unit (FIU) can name Virtual Digital Asset Service Providers as businesses that need to report money laundering. This lets the FIU keep an eye on and stop illegal actions like laundering money and funding terrorism.
India Plans Broader Crypto Policy
Law enforcement agencies, such as the Reserve Bank of India, are allowed to look into and stop illegal activities under current laws, even though there isn’t a complete regulatory system in place yet. As an example, Binance was recently told by the Directorate General of GST Intelligence to pay $86 million in taxes.
Additionally, Chaudhary said that the government does not gather information on cryptocurrencies because they are a “unregulated” area. He talked about the G20 Roadmap on Crypto Assets, which was approved last year while India was president. It is based on a synthesis study written by the IMF and the FSB.
This plan tells member countries how to regulate cryptocurrencies, and India is one of the G20 countries that are currently looking at the pros and cons of these digital currencies. Working together with global “standard setting bodies” is the next thing that needs to be done before any rules are thought about.
Chaudhary didn’t talk about the discussion paper that the government is going to put out soon about how it feels about cryptocurrencies. But recently, Ajay Seth, the Secretary of Economic Affairs, said that an inter-ministerial group is working on a “wider policy for cryptocurrencies” based on IMF-FSB principles. The paper should be out before September 2024.
India has a license system run by the FIU that makes people report the crypto they own and pay a 30% tax on capital gains. This is because of a tax law that was passed in 2022.
The country is also promoting its central bank’s digital currency, the e-rupee, which had 1 million retail transactions by the end of June. Now that the trial phase is over, payment apps from companies like AmazonPay and GooglePay have been added.
