1.4 Billion People to Adopt Crypto
The Indian government has no fixed timeline for introducing comprehensive crypto regulations.
Existing measures include taxation on VDA income and oversight under the Prevention of Money Laundering Act.
Indiaās government confirmed no fixed deadline for introducing comprehensive rules on Virtual Digital Assets (VDAs). The authorities stated that efficient coordination is only possible with the help of international cooperation and compliance with the shifting global standards. In their response to parliamentās questions, authorities stressed the need for international agreement and clear rules instead of rash action.
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1ā£ Comprehensive Framework: The government is working on a regulatory framework for VDAs but emphasizes the need for international collaboration to address their borderless nature and avoid regulatory arbitrage. pic.twitter.com/Njlvw48Urj
ā Crypto India (@CryptooIndia) December 16, 2024
Indiaās leaders see VDAs as borders, thus local legislation is not effective without the cooperation of other countries. Officials met with the industry players and the international organizations, both in a formal and informal manner. Based on this, policy teams noted that sound guidelines for the new digital assets have to be developed to prevent the situations that occur when every country develops its rules on its own.Ā
The current G20 Roadmap on Crypto Assets adopted during Indiaās presidency underlined the importance of cooperation. Policymakers have realized that geographical locations cannot restrict comprehensive control. Rather, they envision a global process that is integrated with rules being created based on the wisdom of the crowd. This position further cements that no single timeline can be adequate if it fails to capture the essence of international crypto transactions
Strengthening Legal and Tax Frameworks
India has already implemented certain laws and taxation rules in relation to VDA-based transactions. The Prevention of Money Laundering Act (PMLA) incorporated these assets in its ambit in March 2023. The tax regulation of incomes from cryptocurrencies falls under the Income Tax Act of 1961.Ā
Other legal instruments used in the surveillance include the Information Technology Act of 2000 and the Companies Act of 2013. The recent judgment of the Income Tax Appellate Tribunal in Jodhpur gives a clear idea that such an asset is considered as a capital gain when sold. This decision offers some more guidance for taxpayers who have been engaging in transactions prior to the 2022 regulations on VDAs in the country.
Indiaās position comes as the local adoption of cryptocurrencies increases. The country has seen a rise in grassroots interest, drawing the attention of investors looking to capitalize on the digital asset market.Ā
International Efforts to Regulate Crypto
However, India is not the only country grappling with the challenges of regulating cryptocurrency. Recently, the UK Financial Conduct Authority (FCA) launched a consultation to enhance the regulation of digital assets within the country. Unveiled on 16 December, the FCAās initiative is in line with its goals of promoting innovation and preventing market abuse, financial fraud, and non-transparent practices that harm consumers.
On the other hand, Iran has changed its approach towards digital currencies from banning to regulating them. Recently, Iranās economy minister, Abdolnaser Hemmati,revealed more about the governmentās approach to managing risks in the economy while capitalizing on digital currencies. While speaking at an event in Tehran, Hemmati explained that the country is to build a āsandboxā where crypto would be allowed, but the economy would be protected.
Speaking for the Trump Organization, Executive Vice President Eric Trump outlined plans to turn the United States into a crypto nation. In an interview with CNBC, Trump stated that such change could be achieved because of āsensibleā regulatory frameworks. This view is in line with rising sentiments in the US, supported by a strong performance of the cryptocurrency market and increasing investorsā demand.
