Date: February 2, 2025 | 03:27 PM GMT
In a significant move reflecting global trends, India is currently reevaluating its stance on cryptocurrencies, a senior government official has announced. Economic Affairs Secretary Ajay Seth shared with Reuters that the review is underway due to changing attitudes towards digital assets in several countries, including the United States where President Donald Trump has recently announced crypto-friendly policies.
Source:@WatcherGuru (X)
This review could potentially delay the release of a much-anticipated discussion paper on cryptocurrencies, which was initially slated for September 2024. Seth highlighted that the global nature of cryptocurrencies necessitates a coordinated international approach rather than a unilateral one by India.
The backdrop to this policy reevaluation includes India’s previous regulatory actions. Despite imposing a 30% tax on income from crypto transfers and a 1% tax deduction at source (TDS) on transactions to discourage trading, the Indian populace has continued to invest heavily in digital assets. This interest persists even after the government’s Financial Intelligence Unit (FIU) issued show-cause notices to nine offshore crypto exchanges for non-compliance with local laws in December 2023, and fined Binance, the world’s largest crypto exchange, in June 2024.
India’s approach has been a mix of stringent regulations and openness to dialogue, especially after the Supreme Court overturned a banking ban on crypto transactions in 2020. The nation’s market regulator has also suggested the oversight of several bodies over cryptocurrency trade, showing some level of acceptance towards private virtual assets, contrasting with the central bank’s skepticism about their macroeconomic risks.
The global context is equally dynamic. With countries around the world signaling various stances, the U.S. under Trump’s administration is notably more welcoming, influencing India’s policy considerations. The government’s reassessment is aimed at aligning its policies with these international shifts, ensuring that India does not lag in the rapidly evolving digital asset space.
This move by India is not just about regulation but also about understanding the broader implications of digital currencies in a borderless digital economy. As countries grapple with how to regulate cryptocurrencies, India’s latest review could set a precedent for others, balancing between fostering innovation and managing economic risks.
The Indian government’s next steps will be closely watched by investors, businesses, and crypto enthusiasts alike, as they could redefine the future landscape of cryptocurrencies in one of the world’s largest economies.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making any investment decisions.
