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India is planning to release a discussion paper outlining its policy stance on cryptocurrencies by September, according to Senior Finance Ministry Official Ajay Seth.
In September 2023, Seth said India would analyse and decide its own position on crypto in the "coming months."
India plans to put out a discussion paper outlining its policy stance on cryptocurrencies before September, according to Indian news outlet Moneycontrol, citing an interview with Economic Affairs Secretary Ajay Seth.
Seth's interview does not suggest a commitment to regulating crypto through a comprehensive legislation but instead a position based on stakeholder consensus on the matter.
““The policy stance is how does one consult relevant stakeholders, so it is to come out in the open and say here is a discussion paper these are the issues and then stakeholders will give their views,” said Seth who is the Economic Affairs Secretary. "At the moment, an inter-ministerial group, is looking into a wider policy for cryptocurrencies. We expect to come out with the discussion paper before September."
The inter-ministerial group includes India's central bank, the Reserve Bank of India (RBI), and market regulator, the Securities and Exchange Board of India (SEBI). The RBI has been averse to legitimizing crypto or stablecoins, seeking instead to prohibit them because, it argues, digital assets pose macro economic stability risks for the emerging nation. SEBI has been not been opposed to regulating digital assets and has recently said that the oversight of cryptocurrency trading should be vested in several authorities.
India does not have a comprehensive crypto legislation but has imposed stiff taxes on the sector. However, it has introduced a requirement for crypto entities to get registered with the country's Financial Intelligence Unit (FIU-IND) to adhere to anti-money laundering (AML) and terrorism financing standards set by global bodies such as the Financial Action Task Force (FATF), marking a credibility shift for the industry.
“In India it (cryptocurrencies) is being regulated from the perspective of AML and EFT (Electronic Funds Transfer) alone. Regulation starts and ends there, it cannot be beyond that, so should the remit be more? What should be the policy stance? All that will come out in the discussion paper," Seth said according to the report.
In September 2023, Seth said India would analyse and decide its own position on crypto in the "coming months" after considering global leaders' stance on an acceptable crypto rule framework. That statement had come on the sidelines of India's presidency of the Group of 20 in which it had prioritized consensus based framing of global crypto rules.
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