India's Crypto Discussion Paper on Hold Due to Other Priorities
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Loading... - Kalpesh Durga
- 14 Oct 2024
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India's financial authorities have delayed the release of a discussion paper on cryptocurrency policy, as they focus on other pressing matters such as the national budget during an election year, international meetings, and the upcoming World Bank annual meetings. According to sources familiar with the situation, the document was initially expected by September after consultations with stakeholders, including the central bank and the markets regulator. Although the intention to publish the paper remains, no timeline has been set, and the delay has not been publicly announced.
India, the world's fifth-largest economy, currently lacks comprehensive legislation on cryptocurrencies. While the sector is unregulated, the government has imposed significant taxes and requires crypto entities to register with the Financial Intelligence Unit (FIU-IND) to comply with anti-money laundering (AML) and terrorism financing standards set by global bodies like the Financial Action Task Force (FATF).
Officials have been preoccupied with more immediate demands, including preparations for the 2024 annual meetings of the International Monetary Fund (IMF) and the World Bank. Additionally, they are engaged in numerous multilateral and bilateral meetings amid ongoing regional conflicts, such as the wars between Russia and Ukraine and in the Middle East.
The Finance Ministry is also focused on managing the election year's financial planning, which involves preparing two budgets: an interim budget in February before the July elections and a full budget afterward. This requires extensive consultations across the country.
Despite a significant $234 million hack of the Indian cryptocurrency exchange WazirX, authorities do not view crypto legislation as an urgent issue, unlike two years ago. The delay in the discussion paper reflects a shift in priorities, as officials address more immediate economic and geopolitical challenges. The situation underscores the complexity of balancing domestic policy development with international and fiscal responsibilities.
