India's crypto sector has been eagerly anticipating a comprehensive regulatory framework to safely and legally establish and expand their businesses. However, the Indian government is not yet ready to follow regions like the EU and the UAE in presenting a detailed national crypto rulebook. In a written reply to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary stated that there is no proposal to introduce legislation for regulating the sale and purchase of virtual assets in the near future.
Chaudhary was answering questions on government's stance on the crypto sector, directed at him by GM Harish Balayogi, member of the parliament. Balayogi wished to enquire whether the government has any proposal aiming to bring more rules to govern the crypto sector.
Replying to the questions, Chaudhary said, “currently, there is no proposal to bring legislation for regulating the sales and purchase of virtual digital assets in the country. However, for specific oversight purposes such as Anti Money Laundering (AML) and Countering the Financing of Terrorism (CFT), the Financial Intelligence Unit India (FIU-IND) has been authorised to designate Virtual Digital Asset Service Providers (VDSAPs) as Reporting Entities (RE) under the Prevention of Money Laundering Act, 2002 (PMLA).”
The questions from Balayogi further inquired if the government has conducted any research work into the present status of the VDAs in circulation and whether the government has an exact number of firms working presently in India's crypto ecosystem.
To this, Chaudhary said that the government does not collect data around crypto work given that the sector is ‘unregulated' in the country.
India's Future Plans for Crypto Regulations: What to Expect
India has been promoting the creation of a crypto legislation, that would work uniformly on the global level. During its G20 Presidency last year, India collaborated with the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to draft a roadmap for crypto legalisation for all the members of the G20 group.
As per Chaudhary, all G20 nations are currently in a phase where they are expected to analyse the pros and cons that crypto could bring to their respective tables. Later, as the next step, the G20 nations will work with global standard setting bodies to appropriately consider any necessary measures for crypto assets.
In conversation with Gadgets360, Sharat Chandra, the founder of blockchain-focussed EmpowerEdge Ventures said, “This is a clear indication that the government is not going to change its stance on crypto regulations till the time there is a global consensus on regulation.”
While India continues to assess the impact that crypto could have on its financial system, the Reserve Bank of India is looking to onboard UPI apps like Google Pay, PhonePe, and Amazon Pay into the advanced trials of the eRupee CBDC.
