India is reassessing its position on cryptocurrencies, influenced by evolving perspectives on the digital asset in other countries, a senior government official told Reuters on Sunday.
The review follows crypto-friendly policy announcements elsewhere and could push back the release of a 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,” said Ajay Seth, India’s Economic Affairs Secretary.
Seth emphasized that India’s approach cannot be unilateral, given that such assets “don’t believe in borders.”
While Seth didn’t directly name the United States, the policy changes there are significant. Former U.S. President, Donald Trump, recently ordered the establishment of a cryptocurrency working group to suggest new digital asset regulations and explore the creation a national cryptocurrency stockpile, fulfilling a promise to overhaul U.S. crypto policy.
Despite India’s stringent regulatory approach and high trading taxes, Indian citizens have invested heavily in 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 following its registration with the FIU in an effort to restart operations in the country.
Last year, India’s market watchdog suggested that several regulators supervise cryptocurrency trading, indicating a willingness from some authorities to permit the use of private virtual assets.
This stance contrasts with the Indian central bank’s position, which has consistently held that private digital currencies pose a macroeconomic risk.
