India’s crypto sector eagerly awaits a comprehensive regulatory framework to safely and legally establish and expand its businesses. However, the Indian government has indicated that it is not yet ready to follow regions like the EU and the UAE in presenting a detailed national crypto rulebook.
In a written reply to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary clarified that legislation to regulate the sale and purchase of virtual assets is not planned for the near future.
Pankaj Chaudhary was responding to questions from GM Harish Balayogi, a member of parliament, who inquired about the government’s intentions to introduce more regulations for the crypto sector. Chaudhary stated that, at present, there is no proposal to bring legislation to regulate virtual digital assets.
However, he mentioned that for specific oversight purposes such as anti-money laundering (AML) and countering the financing of terrorism (CFT), the Financial Intelligence Unit India (FIU-IND) has been authorized to designate virtual digital asset service providers (VDSAPs) as reporting entities under the Prevention of Money Laundering Act, 2002 (PMLA).
When asked about the government’s research into the current status of virtual digital assets (VDAs) and the number of firms operating within India’s crypto ecosystem, Chaudhary acknowledged that the government does not collect data in this sector, given that it remains unregulated.
India has been advocating for the creation of global, uniform cryptographic legislation. During its G20 Presidency last year, India collaborated with the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to draft a roadmap for crypto legalization for all G20 members.
According to Chaudhary, all G20 nations are currently analyzing the pros and cons of crypto. The next step will involve these nations working with global standard-setting bodies to consider appropriate measures for crypto assets.
Sharat Chandra, founder of blockchain-focused EmpowerEdge Ventures, commented to Gadgets360 that the government will likely change its stance on crypto regulations once a global consensus is reached. This indicates a cautious approach from India, focusing on international collaboration and standards before implementing domestic regulations.
As India continues to evaluate the impact of crypto on its financial system, the Reserve Bank of India (RBI) is advancing its efforts with the Central Bank Digital Currency (CBDC). The RBI is looking to onboard UPI apps like Google Pay, PhonePe, and Amazon Pay into advanced trials of the rupee, signaling a parallel approach to digital finance innovation.
