- India plans to release a discussion paper on its cryptocurrency policy before September.
- The paper seeks stakeholder feedback on cryptocurrency regulatory approaches.
- The 1% TDS rate on cryptocurrencies remains unchanged for the fiscal year 2024-2025.
Economic Affairs Secretary Ajay Seth revealed that India will release a discussion paper on its cryptocurrency policy before September. This document seeks stakeholder feedback and will outline potential regulatory frameworks beyond the current focus on anti-money laundering (AML) and counter-terrorism financing (CTF) standards. According to the local news outlet, this paper will also have suggestions for the remit of regulations for cryptocurrencies in India.
The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) will play central roles in the policy review. The RBI has shown concerns over the macroeconomic risks led by digital assets and stands for strict actions. In contrast, SEBI supports a regulatory approach and proposes that oversight be distributed among multiple authorities.
Meanwhile, India’s Finance Minister Nirmala Sitharaman has reaffirmed the 1% Tax Deducted at Source (TDS) rate on cryptocurrencies for the fiscal year 2024-2025, maintaining the current tax framework for the sector.
India’s Past Stance on Crypto Legislation
Despite ongoing discussions, India has yet to introduce comprehensive crypto legislation. The government had previously drafted a bill in 2021 proposing a ban on cryptocurrencies, but it has yet to be introduced. Also, the recent extension of AML and CTF standards to crypto-assets and intermediaries marks a significant step in aligning with global regulatory practices.
This move follows India’s support for a global regulatory framework under the G20. It also comes as other nations, such as the United States, explore significant regulatory changes in the cryptocurrency market.
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