Indian Government May Revise Cryptocurrency Stance Amid Global Policy Shifts
India has maintained a strict regulatory environment for cryptocurrency, with frequent changes in policy and heavy taxation on crypto transactions. However, a shift in the government’s approach may be on the horizon. According to a report by Reuters, authorities are reconsidering their stance on cryptocurrency trade and investment in the country.
This potential change is believed to be influenced by evolving global perspectives on digital assets, particularly in the United States. Former President Donald Trump has recently made pro-crypto statements, and just before his inauguration, he launched his own meme coin. This move contributed to Bitcoin reaching an all-time high of $100,000, signaling a growing acceptance of cryptocurrency on a global scale.
Indian Authorities Tighten Grip on Offshore Crypto Exchanges
Indian regulatory bodies have maintained a firm stance on cryptocurrency regulations. In December 2023, the Financial Intelligence Unit (FIU) issued show-cause notices to nine offshore crypto exchanges, including Binance and KuCoin, for alleged non-compliance with local laws.
In addition to the notices, the FIU urged the Ministry of Electronics and Information Technology to block access to these platforms’ URLs within India. This move reflects the government’s continued efforts to regulate cryptocurrency trading and enforce compliance among foreign exchanges operating in the country.
Binance Fined ₹ 188.2 Million in India Amid Regulatory Crackdown
In June 2024, Binance, the world’s largest cryptocurrency exchange, was hit with a hefty fine of ₹188.2 million in India. This came just a month after the exchange registered with the Financial Intelligence Unit (FIU) in an effort to resume its operations in the country.
According to the FIU, the penalty was imposed for violations of the Prevention of Money Laundering Act (PMLA), 2002, which mandates virtual digital asset service providers (VDA SPs) to register as ‘Reporting Entities’ and adhere to anti-money laundering regulations.
India’s skepticism toward cryptocurrency has been evident for years. In 2023, former RBI Governor Shaktikanta Das took a firm stance against digital currencies, stating at the Business Today Banking and Economy Summit that crypto “should be banned” due to its speculative nature and lack of intrinsic value.
Despite this, a recent report suggests that the Indian government may be reconsidering its approach to cryptocurrency, giving traders hope for a more structured regulatory framework. As global developments, particularly in the US, influence the discourse around digital assets, the government will have to navigate both external pressures and domestic regulatory concerns.
The long-awaited discussion paper on cryptocurrency, initially expected in September 2024, is now highly anticipated, with hopes that it could bring clarity and positive reforms for the industry in India.
With the government reconsidering its cryptocurrency stance, it’s vital to stay informed about legal obligations. Vakilsearch provides comprehensive legal guidance, supporting companies in adapting to evolving regulations and ensuring full compliance throughout the year.
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