India’s crypto future will depend on global cooperation: Gov

The Indian government informed Lok Sabha on Monday that there is no fixed timeline for introducing comprehensive regulatory guidelines for the Virtual Digital Assets (VDAs) or crypto assets in the country.

Earlier this year, the government was asked by two members of Parliament whether it was taking steps to establish a comprehensive regulatory framework for the Virtual Digital Assets. The members also asked for details of the timeline anticipated for the introduction of regulatory guidelines if there are any. 

In its reply, the Indian government shared a note and emphasized that Virtual Digital Assets (VDAs) are borderless and it requires international collaboration between countries to prevent regulatory arbitrage. This is why India believes any regulatory framework concerning VDA can be effective only when international collaboration exists.

“All jurisdictions, including India, are expected to evaluate their country-specific characteristics and risks, and engage with standard-setting bodies and the G20 to appropriately consider any necessary measures for crypto assets,” says MoS Finance Pankaj Chaudhary in reply.

In March 2023, the government brought VDAs under the purview of the Prevention of Money Laundering Act, 2002 (PMLA) to bring VDAs transactions under watch. It also later shared that the income from these assets is taxable. 

In addition, the International Monetary Fund (IMF) and Financial Stability Board (FSB) Synthesis Paper, along with the ‘G20 Roadmap on Crypto Assets,’ was adopted last year during India’s Presidency of the G20.  

This synthesis paper provided a coordinated and comprehensive policy along with a regulatory framework for crypto assets. It also addressed several risks, specifically for emerging markets and developing economies (EMDEs).