- India signals potential shift in cryptocurrency stance, influenced by global trends and Trump’s pro-crypto moves in the US.
- Economic Affairs Secretary confirms review of cryptocurrency discussion paper amid changing international perspectives.
- Indian regulatory bodies maintained strict oversight, with FIU issuing notices to 9 offshore exchanges in December 2023.
- Binance faced Rs 188.2 million fine in June 2024 for PMLA violations despite FIU registration.
- Government’s revised approach could balance external pressures with domestic regulatory concerns.
India’s cryptocurrency landscape appears poised for transformation as government officials signal a potential policy shift, influenced by evolving global perspectives and particularly the United States‘ increasingly crypto-friendly stance under Donald Trump, who recently launched his own meme coin.
The reassessment comes as Bitcoin reached unprecedented values of $100,000, driven by Trump’s cryptocurrency initiatives. Economic Affairs Secretary Ajay Seth acknowledged this shift, stating, “More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of usage, acceptance, and the importance of crypto assets.”
In contrast to India’s traditionally rigid stance, the US has embraced cryptocurrency innovation, with Trump establishing a dedicated cryptocurrency working group focused on developing national digital asset regulations and reserves.
India’s regulatory framework has remained stringent, evidenced by the Financial Intelligence Unit’s December 2023 action against nine offshore exchanges, including industry leader Binance. The crackdown targeted non-compliance with India’s anti-money laundering protocols, resulting in URL blocking requests and substantial fines.
The regulatory environment faced additional pressure when former RBI Governor Shaktikanta Das advocated for an outright ban, describing cryptocurrency as pure speculation without intrinsic value.
The delayed cryptocurrency discussion paper, originally scheduled for September 2024, may now reflect a more nuanced approach. This potential policy evolution suggests India’s regulators are weighing international developments against domestic concerns, potentially opening new opportunities for cryptocurrency traders while maintaining necessary oversight measures.
Virtual Digital Asset Service Providers (VDA SPs), under the Prevention of Money Laundering Act (PMLA), 2002, must register as ‘Reporting Entities’ and adhere to strict anti-money laundering protocols, representing the current regulatory framework that may see modifications in light of these developments.
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