India’s Economic Affairs Secretary Ajay Seth announced plans to introduce “measures around crypto” this year during a post-budget press conference in Mumbai. Meanwhile, India’s Finance Minister Nirmala Sitharaman aims to develop a global standard operating procedure for regulating crypto assets at the upcoming G20 meeting of finance ministers and central bank governors.
Measures to Address Crypto Risks
Ajay Seth highlighted the potential risks of using cryptocurrencies in the financial sector and stated that in India, crypto is not being considered as a currency. He emphasized the need for measures to address the risks associated with using crypto as a token.
Global Approach to Regulating Crypto Assets
Nirmala Sitharaman will be leading discussions on a global standard operating procedure for regulating crypto assets at the G20 meeting. She acknowledged the importance of recognizing the central bank as the authority for issuing cryptocurrencies and emphasized the need for a collective effort in regulating crypto assets. The finance minister also noted that technology does not respect borders, and a common approach to regulating the crypto ecosystem is necessary.
Tax Penalties for Crypto Assets
India’s Finance Bill 2023 includes new tax penalties related to crypto tax deducted at source. This year’s Economic Survey 2023 also highlighted the need for a common approach to regulating the crypto ecosystem.
Read More: Australia Releases Crypto Taxonomy Consultation Paper
Reserve Bank of India’s Stand on Crypto
The Reserve Bank of India (RBI) has repeatedly recommended a ban on cryptocurrencies like Bitcoin and Ether. RBI Governor Shaktikanta Das stated that crypto could undermine the authority of the central bank and lead to the next financial crisis if not banned. The RBI is currently piloting its central bank digital currency, the digital rupee.
India’s government is taking steps towards regulating the crypto industry, including introducing measures to address crypto risks and developing a global approach to regulating crypto assets. The RBI continues to warn against the use of cryptocurrencies and is focusing on its digital rupee initiative.
