India is reportedly gearing up to release a significant discussion paper in June on the regulation of cryptocurrencies. This move marks a shift in the country’s approach, which has previously oscillated between stringent tax measures and regulatory ambiguity. The decision to delve into the crypto sector signals a growing acceptance of the industry by the government, especially as the market continues to reach new all-time highs.
US President Donald Trump’s favorable stance on cryptocurrencies, coupled with the ongoing trade disputes, has propelled the global digital asset market to record positive gains. Bitcoin, the leading cryptocurrency, recently surpassed its all-time high, reaching over $111,900 before experiencing a slight pullback to around $105,000.
India is set to unveil its crypto plan soon, drawing inspiration from the International Monetary Fund (IMF) and the Financial Stability Board (FSB) synthesis report. The upcoming paper is expected to invite public feedback on how the country should navigate the regulatory landscape, taking cues from other jurisdictions.
The crypto landscape in India has been murky, with the recent budget imposing a hefty 30% tax on crypto gains without granting the sector legal recognition. Regulators have mandated exchanges to register with India’s Financial Intelligence Unit, while the Reserve Bank of India has raised concerns about risks such as money laundering and terrorism financing, advocating for its own Central Bank Digital Currency (CBDC).
A senior government official emphasized that India’s crypto decisions will be guided by national interest, avoiding impulsive reactions given the sector’s far-reaching implications. The Supreme Court of India has criticized the government for its prolonged silence on crypto regulation, warning of potential misuse stemming from the legal void. The lack of clear rules has prompted a significant portion of Indian crypto trading to shift offshore, weakening the country’s position in the global crypto economy.
As other major economies make strides in crypto regulation, India’s top court has urged the government to expedite the formulation of clear rules. The court emphasized the need for regulation rather than outright bans, echoing sentiments from global counterparts like the US and EU, where pro-crypto reforms are underway.
In the midst of these developments, the cumulative crypto market cap experienced a slight decline, standing at $3.31 trillion with a 24-hour trading volume of $142.3 billion. Despite a recent dip in Bitcoin’s price by 5% over the past week, the overall market remains active. Ripple’s XRP price also saw a significant drop of 10% during the same period.
As the crypto sector continues to evolve globally, India’s forthcoming discussion paper signals a potential shift towards a more structured regulatory framework, aligning with the changing landscape of digital assets worldwide.