The Finance Ministry has stated that no timeline can be given for the introduction of comprehensive regulatory guidelines for Virtual Digital Assets (VDAs) in India.
Responding to written questions from parliamentarians Appalanaidu Kalisett and Lavu Sri Krishna Devarayalu asked in the Rajya Sabha about the details of the timeline anticipated for the introduction of regulatory guidelines for the crypto assets in the country, Minister of State in the Finance Ministry Pankaj Chaudhary said that consultations were held with relevant stakeholders with regard to forming regulations for crypto assets. However, he did not give any timeline for introducing a comprehensive regulatory framework for the crypto industry in the country.
“…government has undertaken formal and informal consultation with stakeholders including industry and with relevant international organizations from time to time on policy formulation of crypto assets. There is, however, no timeline anticipated for introduction of comprehensive regulatory guidelines for VDA industry in India,” the minister said.
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On whether the government is preparing a Discussion Paper to outline its stance on VDA regulation, the ministry said Virtual Digital Assets (VDAs) are by definition borderless and require international collaboration to prevent regulatory arbitrage; and any comprehensive
regulatory framework on the subject can be effective only with significant international collaboration on evaluation of the risks and benefits and evaluation of common taxonomy and standards.
Crypto assets brought under PMLA Act, 2002 in 2023
Crypto assets were brought under the purview of the Prevention of Money Laundering Act, 2002 (PMLA) in March 2023 to bring the transactions involving VDAs within the ambit of PMLA. Further, income from these assets is taxed under the Income Tax Act, 1961 and different aspects of the VDA sector are regulated under the IT Act, 2000, and the Companies Act, 2013.
Further, during India’s Presidency of the G20 last year, the International Monetary Fund (IMF) and Financial Stability Board (FSB) Synthesis Paper, along with the ‘G20 Roadmap on Crypto Assets’, was adopted. This Synthesis Paper provides a coordinated and comprehensive policy and regulatory framework for crypto assets, addressing the full range of risks, including those specific to emerging markets and developing economies (EMDEs).
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