Oct 2, 2023 09:31 UTC
Oct 9, 2023 at 21:46 UTC
India not planning to ban Cryptocurrencies anymore: 5 Point Regulatory Framework in Plan
India is actively developing a regulatory framework for cryptocurrencies based on the combined recommendations of the International Monetary Fund (IMF) and the Financial Stability Board (FSB). This framework could potentially lead to legal legislation within the next five to six months. Here’s a brief overview of the article:
Background: India recently participated in the G20 summit, where the most significant decision for the crypto community was the acceptance of the IMF-FSB joint recommendations for crypto regulations. These recommendations advocate for regulating the crypto market instead of imposing a complete ban.
India’s Approach: Crebaco, a blockchain analytic firm that has consulted for several G20 committees, provided insights into India’s stance on crypto. According to Sidharth Sogani, CEO of Crebaco, India is developing a five-point legislative framework for crypto with an emphasis on global collaboration, especially in areas like crypto taxation.
- Implementing advanced Know Your Customer (KYC) procedures for crypto companies, in line with the Foreign Account Tax Compliance Act and existing Anti-Money Laundering standards.
- Mandating crypto platforms to provide proof-of-reserve audits to regulators in real-time.
- Establishing a consistent taxation policy across nations.
- Potentially granting crypto exchanges a status similar to authorized dealers (akin to banks) under the Reserve Bank of India (RBI) guidelines.
- Requiring key roles, such as a Money Laundering Reporting Officer, for crypto platforms.
Global Perspective: Many countries, including the US and Europe, have already established specific crypto regulations. India, on the other hand, has chosen to tax crypto, imposing a 30% tax on crypto gains in 2022. However, the joint recommendations from the IMF and FSB, coupled with the finance ministry’s assurance, indicate a promising future for the crypto industry in India.
Official Stance: An executive from the finance ministry confirmed that India is considering the IMF-FSB crypto recommendations and will be focusing on creating regulations based on them in the upcoming months. The official also emphasized that banning cryptocurrencies is no longer a viable option, especially if other countries continue to accept and regulate them.
In summary, India is moving towards a regulatory approach for cryptocurrencies, emphasizing global collaboration and considering the joint recommendations of the IMF and FSB. The country’s five-point legislative framework aims to provide clarity and structure to the crypto industry, ensuring its growth and security. Learn More