Indian Government Will Engage With Industry Stakeholders to Draft a Consultation Paper for Future Legislation

• The Secretary of the Department of Economic Affairs will draft a consultation paper by collaborating with Indian crypto stakeholders.
• Crypto regulations are much awaited by industry participants in India owing to its high adoption rate.

The Indian government is engaging with crypto stakeholders to draft a consultation paper. That will help it develop its long-awaited regulations for the asset class. This approach of consulting stakeholders from the industry will allow the government to address crucial concerns and create a vast arching framework, leaving nothing ambiguous.

A report published by CNBCTV 18 last week broke the news, mentioning the Secretary of the Department of Economic Affairs (DEA) would take charge of the consultation paper. It is set to be out between September and October. With the paper rolling out, the Indian crypto ecosystem will eagerly await further updates, as the country is the biggest digital asset adopter at the grassroots level.

However, the government has not matched that by introducing regulations to protect investors or make many aspects of the industry clear for its participants.

In fact, Indians have been anxious since the G20 Summit, when Prime Minister Narendra Modi announced emerging technologies like cryptocurrency and artificial intelligence must be regulated. The Indian Finance Minister, Nirmala Sitharaman, also mentioned a unified approach needed by G20 participants to regulate cryptocurrency. However, no developments occurred after that, leaving crypto users and businesses in the country in suspense.

India Took Action Against Offshore Exchanges Not Following Its Money Laundering Regulations

The most recent development in the industry was the banning of a handful of overseas crypto exchanges operating in the country in December 2023 by the Financial Intelligence Unit—India (FIU-IND). The regulator banned the following firms—Binance, KuCoin, Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex—for not adhering to Indian anti-money laundering (AML) laws. Of those exchanges, Binance paid penalties of $2.25 million and registered with the agency to operate in the subcontinent again with a promise of following its AML regulations.

 

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