The government reportedly plans to put out a discussion paper on its crypto policy stance in the country before September.
An inter- ministerial group including the RBI and the SEBI are working on this paper
Photo Credit: Pexels/ Katrin Bolovtsova
The government reportedly plans to release a discussion paper before September, outlining its stance on crypto-related policies in the country, and crypto stakeholders — including the Bharat Web3 Association (BWA) — have already expressed their readiness to take part in the process. The paper is expected to pave the way for regulation of cryptocurrencies in India, while ensuring that firms are in compliance with rules that could be framed by the government in the future.
Economic Affairs Secretary Ajay Seth claimed in a recent interview that this discussion paper will have suggestions around the future of crypto regulations in India, while also seeking ideas from industry stakeholders on how to ensure the growth of crypto while keeping India's legal and financial sanctity intact.
India's current crypto regulations focus primarily on creating an anti-money laundering ecosystem, detailing dos and don'ts around electronic funds transfer, and countering terror financing.
As per Seth, however, this policy stance discussion paper will push the topics on defining the repercussions for crypto law offences alongside other topics as part of the framing of a wider policy cluster.
The Reserve Bank of India (RBI) along with the Securities and Exchange Board of India (SEBI) are part of the inter-ministerial group that is headlining the work around this discussion paper.
In conversation with Gadgets360, BWA chairperson Dilip Chenoy said clarity around crypto rules in India can propel the country to become a leader in Web3, as the country already has the largest group of developers in the world. Chenoy further said that all of its 42 members and counting – will put in their hundred percent efforts in assisting the government on this paper.
“We welcome the Indian government's move to release a discussion paper outlining its policy stance on virtual digital assets before September. A heathy regulatory framework for digital assets will enable innovation while protecting the interest of millions of VDA users in India. We will actively participate in the consultation process and will share our views and recommendations for drafting policy,” Chenoy said.
“By seeking inputs from various stakeholders can potentially create a balanced regulatory framework,” said Edul Patel, CEO of crypto investment firm Mudrex, as commenting on the development. “Currently, India's focus on cryptocurrencies revolves around AML and CTF measures, but a broader remit is definitely needed to expand the scope to include consumer protection, market integrity, and innovation that can ensure responsible growth.”
A2Z Crypto CEO Krishnendu Chatterjee highlighted the points that the members from India's Web3 industry are looking to highlight to the government while submitting their suggestions for this paper. Speaking to Gadgets360, Chatterjee said the industry seeks clarity on whether crypto is classified as a commodity or a security and if crypto is even a part of India's payments act. Furthermore, the sector is looking for laws on unbundling of the responsibilities on exchanges and custodians by mandating the segregation of client funds.
Revisions in India's crypto taxes and formation of a dedicated body to oversee the Web3 sector are also among top agendas that the crypto circle aims to bring to the government's notice.
CoinSwitch Co-Founder Ashish Singhal said he is eager to see what the government comes up with in this paper before September, after roping in ideas and suggestions from the industry insiders.
In conversation with Gadgets360, the leaders of exchanges like Giottus and Pi42 have also noted that if India incorporates a more comprehensive set of crypto regulations, the industry could benefit extensively.
“With global regulations shaping up like MICA in Europe, we hope that this discussion paper will become a kick starter towards building cryto regulatory framework very soon,” said Vikram Subburaj, CEO, Giottus.
According to Avinash Shekhar, CEO and Co-Founder of Pi42, “Crypto regulations can mitigate risks while allowing the industry to grow and develop. A ban on crypto would not only be ineffective but would also stifle innovation within the industry.”
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