India to invite industry stakeholders to contribute to crypto policy in upcoming consultation paper

The Indian government is currently drafting a consultation paper to address key concerns related to cryptocurrencies, as part of its efforts towards greater regulatory clarity around the asset class.

According to a Report from CNBCTV18 On Wednesday, the secretary of the Ministry of Economic Affairs is chairing a panel that is expected to issue a consultation paper, scheduled for publication between September and October.

The Indian government is taking steps to strengthen its national crypto policy as it tries to juggle innovation and regulatory oversight, inviting stakeholder input.

At the G20 summit last year, Indian Prime Minister Narendra Modi called for a global solution. frame to regulate cryptography, artificial intelligence and other emerging technologies.

The move follows the country’s turbulent history with cryptocurrencies after India’s central bank banned financial institutions from dealing in the asset class in 2018. The Supreme Court overturned the ban two years later, allowing cryptocurrency trading to resume despite lingering regulatory concerns.

These concerns include how privately issued cryptocurrencies pose macroeconomic risk, particularly with regard to stablecoins, for which the RBI has already called for a ban on digital assets pegged to fiat currencies, such as the US dollar, or commodities, including gold.

The bill follows the government’s decisive action against non-compliant offshore crypto exchanges, having recently imposed bans on nine major platforms in December. BinanceKuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global and Bitfinex, for failing to comply with India’s anti-money laundering policies.

India’s Financial Intelligence Unit enforced the bans, prohibiting exchanges from operating in the country. Binance, one of the largest exchanges affected, paid a fine of $2.25 million and registration with the FIU, allowing it to resume operations in the Indian market.

India’s stance on cryptocurrency regulation has evolved under the influence of global developments, particularly after the Financial Stability Board incorporated cryptocurrency-related policies into the G20 Roadmap Last year, efforts to unify regulatory standards among emerging economies were encouraged.

Edited by Sebastian Sinclair