India is reassessing its position on cryptocurrencies, driven by evolving international perspectives on the digital asset, a high-ranking government official revealed to Reuters on Sunday.
The review, which comes after recent crypto-friendly policy statements from the U.S., might further postpone the release of a long-anticipated discussion paper on cryptocurrencies, originally slated for September 2024.
“More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of the usage, their acceptance, where do they see the importance of crypto assets. In that stride, we are having a look at the discussion paper once again,” stated Ajay Seth, India’s Economic Affairs Secretary, in an interview.
Seth emphasized that because crypto assets operate beyond national borders, India’s stance cannot be determined unilaterally. He did not directly mention the shifting landscape in the United States, where former President Donald Trump recently ordered the creation of a cryptocurrency working group. This group has been tasked with formulating new digital asset regulations and exploring the potential establishment of a national cryptocurrency stockpile, delivering on a campaign promise to revamp U.S. crypto policy.
Despite India’s stringent regulatory approach and considerable trading taxes, Indian investors have continued to allocate funds to cryptocurrencies in recent years.
In December 2023, India’s Financial Intelligence Unit (FIU) issued show-cause notices to nine offshore cryptocurrency exchanges due to non-compliance with local regulations. Binance, the world’s largest crypto exchange, was fined 188.2 million rupees ($2.25 million) in June 2024, a month after registering with the FIU in an effort to re-enter the Indian market.
Last year, India’s market regulator suggested that several regulators should oversee cryptocurrency trading, indicating that at least some Indian authorities are open to the use of private virtual assets. This stance departs from the position of the nation’s central bank, which has maintained that private digital currencies pose a macroeconomic risk.
