The Finance Ministry recently made it clear in a written reply in the Lok Sabha that the government is not considering any law to regulate cryptocurrency transactions.
“Currently, there is no proposal to legislate to regulate the sale and purchase of virtual digital assets in the country,” Pankaj Chaudhary, Minister of State (MoS) in the Ministry of Finance, told the Lok Sabha through a written reply.
Interestingly, this is not the first time the government has been evasive about its commitment to establishing a regulatory framework for cryptocurrencies.
Union Finance and Corporate Affairs Minister Nirmala Sitharaman recently said that there should be a global understanding about cryptocurrencies and that simply rolling out regulations by a single country would not make much progress in the regulatory arena.
In November 2021, Sitharaman — in response to a question on bitcoin in Parliament — had said that the government had no proposal to recognise bitcoin as a currency.
What do industry players think?
However, crypto industry players are not too pessimistic about Chaudhary’s statement, which was released at the request of the finance ministry, as they are pinning their hopes on a discussion paper on digital currencies likely to be released next month.
“The Secretary of the Department of Economic Affairs (DEA) indicated just a few weeks ago that a discussion paper is expected to be released by September 2024. We remain optimistic and look forward to this paper to better understand the potential next steps for the Virtual and Digital Asset (VDA) sector in India,” said R Venkatesh, Senior Vice President and Head of Public Policy at CoinSwitch.
Similarly, Dilip Chenoy, President, Bharat Web3 Association, also saw hope in the recent comments of the Secretary of the Ministry of Economic Affairs regarding the upcoming VDA Policy Discussion Paper. “We look forward to studying the paper in detail when it is released for public consultation and offering our policy inputs. We commend India’s leadership during the G20 Presidency last year in building consensus on crypto asset policy and adopting the G20 Crypto Asset Roadmap,” Chenoy said.
“We urge the government and regulators to take the lead in formulating a comprehensive regulatory regime for Web3/VDA in India,” he added.
Shivam Thakral, CEO, BuyUcoin, said, “The lack of clear regulation for the nascent industry is a matter of concern as it leaves the crypto-asset sector unregulated in India. Establishing clear policies is important to foster innovation and create jobs. This lack of framework hampers entrepreneurial investment and compromises security.”
CoinDCX declined to comment on the development.
Interestingly, the G20 finance ministers adopted in October 2023 the position paper published by the IMF’s Financial Stability Board (FSB) the previous month.
