Coinspeaker
No Plan to Regulate Sale and Purchase of Crypto, Says India’s Ministry of Finance
India’s Ministry of Finance has confirmed that there are no existing plans to regulate crypto transactions. The Indian Minister of State for Finance Pankaj Chaudhary made this known in a written response to the Lok Sabha, the lower house of the country’s bicameral Parliament.
Chaudhary’s written reply answered questions posed by Parliament member GM Harish Balayogi. The questions sought clarity on several details, including whether the government had done any research on the status of cryptocurrencies in the country and whether there was a total valuation of all assets held by Indian citizens.
Balayogi also sought to find out whether or not there is a plan to regulate crypto transactions, and if there is a plan for an oversight authority to regulate crypto in the country.
Chaudhary responded that the government does not collect data and cryptocurrencies since they are unregulated in India. He wrote:
“Currently, there is no proposal to bring legislation for regulating the sales and purchase of virtual digital assets in the country.”
Existing Laws Regulate Crypto in India
The Minister of State for Finance then added that some existing authorities have oversight functions that cover crypto:
“For specific oversight purposes such as Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT), the Financial Intelligence Unit India (FIU-IND) had been authorized to designate Virtual Digital Asset Service Providers (VDSAPs) as Reporting Entities (RE) under the Prevention of Money Laundering Act, 2002 (PMLA).”
Chaudhary added that existing legal provisions already empower law enforcement agencies to address illicit activities, likely explaining the absence of a specialized law enforcement entity for crypto.
As part of his response, the Minister of State for Finance also added that India adopted the “G20 Roadmap on Crypto Assets” along with a Synthesis Paper from the International Monetary Fund (IMF) and Financial Stability Board (FSB) during the country’s G20 Presidency last year. According to Chaudhary, the Synthesis Paper contains a “coordinated and comprehensive policy and regulatory framework” for crypto, including a full range of risks. Following adoption, all countries, including India, are to evaluate risks specific to their countries and engage with relevant bodies for further measures.
India is not the most crypto-friendly jurisdiction and previously enforced a ban on financial institutions conducting crypto business. In 2018, the Reserve Bank of India (RBI) ordered financial institutions to stop providing crypto services to any persons or entities. Fortunately for the sector, the Supreme Court lifted the ban two years later, stating that the RBI could not show evidence of damage suffered by regulated entities.
Recently, India banned several crypto exchanges for alleged violations of the country’s money laundering regulations. Among the affected entities were major exchanges OKX, Kucoin, and Binance. Authorities had sent show cause notices to these entities last December.
India has now asked Binance to pay 7.22 billion rupees ($86 million) in Goods and Services Tax (GST). According to reports, the Directorate General of GST Intelligence (DGGI) sent Binance a notice highlighting fees the exchange collected from Indians transaction fees. Some sources suggest that Binance earned 40 billion rupees ($476.8 million) in transaction fees.
No Plan to Regulate Sale and Purchase of Crypto, Says India’s Ministry of Finance
