July 29, 2024
By Sharan Kaur Phillora
India plans to release a discussion paper outlining its cryptocurrency policy by September 2024. This decision follows consultations with stakeholders, including industry experts and government officials.
Here’s what we know:
Ajay Seth, Secretary of Economic Affairs, stated that the paper will seek input on various aspects of cryptocurrency regulation, such as compliance, taxation, and consumer protection. Currently, cryptocurrencies are regulated under anti-money laundering laws, but the new paper may propose broader regulations.
The Reserve Bank of India (RBI) has been skeptical of cryptocurrencies, advocating for a ban due to potential economic risks. In contrast, the Securities and Exchange Board of India (SEBI) has suggested a multi-agency approach to regulation.
The discussion paper will also address the high tax rates on crypto profits, which are currently set at 30%, along with a 1% tax deducted at the source for transactions. Critics argue that these rates discourage participation in the market.
This initiative aligns with recommendations from G20 countries during India’s presidency, which advised against banning cryptocurrencies and suggested a framework to manage risks.
The upcoming discussion paper is expected to play a crucial role in shaping India’s approach to cryptocurrency regulation, aiming to balance innovation with necessary safeguards.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
