India's Crypto Policy Delayed Further? Report Suggests Re-Evaluation Of Stances By Multiple Jurisdictions

Despite India’s historically cautious stance, crypto investments in the country remain significant. However, regulatory tensions persist.

The Reserve Bank of India continues to maintain that private digital currencies pose significant macroeconomic risks.

Source : Ewan Kennedy/Unsplash

India is re-evaluating its position on cryptocurrencies following recent international developments, including regulatory changes in major economies, according to a senior Government official, reported Reuters. The decision comes as multiple jurisdictions have softened their stance on digital assets, prompting India to revisit its delayed discussion paper on crypto policy, which was initially expected to be released in September 2024.

Ajay Seth, India’s Economic Affairs Secretary, noted that evolving perspectives in key regions have necessitated a broader review, Reuters reported. "More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of the usage, their acceptance, where do they see the importance of crypto assets. In that stride, we are having a look at the discussion paper once again," he emphasised.

Although Seth refrained from directly mentioning the US, recent policy changes under President Donald Trump have made headlines. Trump recently ordered the establishment of a dedicated crypto task force to regulate digital currencies and explore the development of a national crypto reserve.

Crypto Finds Foothold

Despite India’s historically cautious stance, crypto investments in the country remain significant. However, regulatory tensions persist. In December 2023, the Financial Intelligence Unit (FIU) issued notices to nine foreign cryptocurrency platforms for failing to comply with domestic guidelines.

Binance, the world’s largest crypto exchange, faced a penalty of Rs 188.2 million ($2.25 million) in June 2024, following its registration with the FIU. This move was seen as a step toward resuming operations in India.

While the country's financial market watchdog previously suggested a multi-regulator framework for overseeing crypto transactions, the Reserve Bank of India continues to maintain that private digital currencies pose significant macroeconomic risks.

As India navigates these developments, the future of its crypto landscape remains uncertain, but a renewed policy approach could be on the horizon.

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