India embarks on crafting crypto regulations after ruling out ban
- India was long thought to be planning a complete ban on cryptocurrencies.
- However, in the just concluded G20 Summit, India joined other G20 nations to support IMF-FSB joint recommendations for cryptocurrency guidelines.
- Crypto investors in India can now breathe a sigh of relief as they wait for the crypto framework.
Based on the combined recommendations of the International Monetary Fund (IMF) and the Financial Stability Board (FSB), India is developing a framework for regulating cryptocurrencies that, if approved, could become law in the next five to six months.
According to Siddharth Sogani, CEO of CREBACO, who has collaborated with governmental organizations and departments, the Indian government is developing a five-point crypto legislation with a global perspective.
India just concluded the G20 summit, which the Chinese president declined to attend, on a high note. The summit resulted in several key economic announcements including some that touched on the cryptocurrency industry. For Cryptocurrencies, the most notable decision came in the form of IMF-FSB joint recommendations for cryptocurrency guidelines that India and other G20 nations supported.
The IMF-FSB crypto recommendations
The IMF-FSB crypto proposals advocate for regulating the cryptocurrency market as opposed to a total ban.
The G20 nations can use the regulatory principles and ideas provided by the IMF and FSB to create their own independent yet cooperative crypto legal framework.
India’s 5-point crypto regulatory framework
According to Sogani, the CEO of CREBACO, a blockchain analytics company that provided consultancy services to a number of G20 committees and countries, based on CREBACO’s discussions with government representatives, India is now developing a five-point regulatory framework with an emphasis on international cooperation on specific issues like crypto taxes whose policy took effect in April 2022.
The five-point crypto regulatory framework includes:
- Establishing an advanced Know Your Customer (KYC) system for cryptocurrency enterprises that complies with FATCA and current anti-money laundering regulations.
- Crypto platforms would have to provide regulators with Proof-of-reserve audits in real time.
- A global taxation system that is uniform.
- Under the rules of the Reserve Bank of India (RBI), cryptocurrency exchanges could acquire the status of authorized dealers (like banks).
- For crypto platforms, important positions like the Money Laundering Reporting Officer (MLRO) may be required.