The Indian government is expected to release a comprehensive discussion paper outlining policy options for regulating crypto assets in June, according to a report by The Economic Times (ET), citing sources familiar with the matter.
The paper will reportedly be influenced by the joint synthesis paper published by the International Monetary Fund (IMF) and the Financial Stability Board (FSB). It will also incorporate regulatory practices from various countries and invite public feedback.
One source told ET that the paper is currently being finalized and should be open for public comments next month. A senior official emphasized that India’s approach would prioritize national interest and avoid any rushed decisions, given the complexities of the crypto sector.
Originally scheduled for release in September 2024, the paper marks a significant step in India’s evolving crypto policy.
India’s Evolving Crypto Stance
Despite heavy taxes and strict regulatory measures, Indian investors have remained active in the crypto space. India ranked highest in global crypto adoption for the second consecutive year in 2024, according to blockchain analytics firm Chainalysis.
The government had previously introduced a 1% TDS on crypto transactions and a 30% tax on crypto profits. It also required all crypto exchanges to register with the Financial Intelligence Unit (FIU) and took enforcement actions against unregistered offshore platforms. In 2023, the FIU issued notices to nine exchanges, including Binance, Kucoin, and Bitfinex, for non-compliance.
In February, Economic Affairs Secretary Ajay Seth acknowledged that the global perception of digital assets is shifting and emphasized that India must also take a broader view, since virtual assets are not bound by national borders.
This policy shift comes as the United States, under the Trump administration, pushes for greater acceptance of crypto and NFTs. Earlier this year, Trump signed an executive order to establish a task force responsible for drafting a new regulatory framework for digital assets and exploring the idea of a crypto reserve.
Adding urgency, India’s Supreme Court recently criticized the Centre for delaying the introduction of clear crypto regulations.
