India is currently in the process of drafting a discussion paper on cryptocurrencies, a development that was initially expected to be completed by September. However, other pressing matters, such as the World Bank meetings scheduled for this month, have taken precedence over stakeholder consultations necessary for shaping India’s crypto policy stance.
According to sources familiar with the decision, Indian officials have been focusing on various priorities, delaying the release of the discussion paper that would outline the country’s approach to cryptocurrencies. While the intention to publish the paper remains, there is currently no set timeline for its release.
As the fifth-largest economy in the world, India lacks comprehensive legislation on cryptocurrencies. The planned discussion paper was intended to be a crucial step towards addressing this gap. Although the country considers crypto to be unregulated, it has implemented stringent tax measures on the sector and mandated registration for crypto entities with the Financial Intelligence Unit (FIU-IND) to comply with anti-money laundering (AML) and terrorism financing standards set by global organizations like the Financial Action Task Force (FATF).
Indian policymakers have been preoccupied with various urgent matters, including the upcoming annual meetings of the International Monetary Fund (IMF) and the World Bank, as well as ongoing regional conflicts in Ukraine, Israel, and the Middle East. Additionally, the Finance Ministry has been busy with the demands of an election year, with two budget cycles and consultations across the country.
Despite recent security concerns such as the $234 million hack of Indian cryptocurrency exchange WazirX, authorities do not view crypto legislation as a top priority compared to two years ago. The evolving landscape of cryptocurrency regulation in India reflects the complex challenges faced by policymakers in balancing economic growth, security concerns, and international obligations.
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