- India reviews crypto policies due to the global shift toward digital asset acceptance.
- Despite high taxes, India leads global crypto adoption, ranking #1 in 2024.
- India considers multiple regulators to oversee cryptocurrency trading.
India’s government is reassessing its position on cryptocurrency, possibly changing its regulatory framework in response to the shifting global stance toward digital assets. This review could impact the country’s crypto adoption rate, which has remained strong despite the challenges faced by strict regulations.
The Indian government’s reassessment comes when other nations, notably the United States, have adopted more crypto-friendly policies, fueling debates about how India should regulate the rapidly growing digital asset sector.
A New Discussion Paper on the Horizon
Ajay Seth, India’s Economic Affairs Secretary, confirmed in a recent Reuters interview that the country is actively reviewing its approach to crypto assets, noting the shift in attitudes from other jurisdictions regarding the usage and acceptance of digital assets.
The move is part of a global shift in which nations ranging from the U.S. to others have eased their approach to regulating digital assets. Seth also pointed out that the change in the international market is also influencing India’s stance and noted that the government is considering a new discussion paper in which it will determine its position on digital assets.
Related: India’s Crypto Tax Crackdown vs. China’s Innovation Push—Is India Falling Behind?
India’s Current Crypto Tax Structure
Though crypto remains unregulated in India, the government has implemented a tax structure for digital assets. In 2022, India introduced a 1% tax Deduction at Source (TDS) on crypto transactions and imposed a 30% capital gains tax on crypto investments. Despite these high taxes, India has emerged as a global leader in crypto adoption, ranking first in global crypto adoption metrics in 2024, according to analytics firm Chainalysis.
Challenges and Enforcement in the Crypto Sector
India’s tough regulatory stance has not hindered cryptocurrency investments but has led to increased scrutiny of exchanges and businesses operating in the sector. In December 2023, the Financial Intelligence Unit (FIU) issued show-cause notices to nine offshore crypto exchanges for failing to comply with local regulations.
Related: Binance Entity Faces $85 Million Tax Evasion Probe in India
Later, in June 2024, Binance was fined 188.2 million rupees (around $2.25 million) after allegedly registering with the FIU to operate again in the country.
However, with the global crypto market evolving further, the authorities in India are now listing more regulatory options. In 2023, India’s market regulator suggested that multiple regulators could oversee cryptocurrency trading, confirming that some parts of the government are open to allowing private virtual assets as long as they’re under a more comprehensive regulatory framework.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
