The Indian government is planning to introduce “measures around crypto” this year, according to the country’s Economic Affairs Secretary Ajay Seth. India’s finance minister says cryptocurrency regulation will be discussed in her upcoming G20 meeting of finance ministers and central bank governors.
India Could Introduce Crypto Measures This Year
India’s Economic Affairs Secretary Ajay Seth reportedly said Saturday at a post-budget press conference in Mumbai that India will introduce “measures around crypto” this year.
“The technology of crypto assets like blockchain and others can be used but its use in the financial sector can have several risks,” he was quoted by local media as saying. The official elaborated:
In the course of this year, measures around crypto would be brought out.
The Economic Affairs secretary added: “In India, nobody is talking about using crypto as a currency. The risks are with using it as a token.”
The Indian government has been working on crypto legislation for several years. A draft crypto bill was unveiled in 2019 but it was never taken up in parliament.
India to Discuss Crypto Legislation With G20 Countries
Indian Finance Minister Nirmala Sitharaman reportedly stated Friday in a post-budget interview with Network18 Group that she will be looking at developing a global standard operating procedure (SOP) for regulating crypto assets in her upcoming G20 meeting. Under India’s presidency, the first meeting of the G20 finance ministers and central bank governors is scheduled to be held on Feb. 24-25 in Bengaluru.
Sitharaman said:
We will be looking at global SOP to be available and agreed upon for regulating crypto assets while recognizing the central bank as the authority for issuing cryptocurrencies.
“The rest of the assets created outside that are using very useful financial technologies. Even those have to be discussed because regulations cannot be done by one country singularly, it has to be a collective action because technology doesn’t brook any borders,” the finance minister noted.
During her Budget speech last week, Sitharaman did not mention crypto assets. However, this year’s Finance Bill included several new tax penalties relating to crypto tax deducted at source (TDS). This year’s Economic Survey 2023 also highlighted the need for “a common approach to regulating the crypto ecosystem.”
India’s central bank, the Reserve Bank of India (RBI), has repeatedly recommended banning cryptocurrencies like bitcoin and ether. Noting that crypto could undermine the authority of the central bank, RBI Governor Shaktikanta Das recently said:
If crypto is allowed in India, RBI will lose control over monitoring transactions. Crypto, masquerading as a financial asset, is a completely misplaced argument.
The Indian central bank governor has also warned that crypto could lead to the next financial crisis if it is not banned. Meanwhile, the RBI is currently piloting its central bank digital currency (CBDC), the digital rupee.
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