India’s government is consulting with the International Monetary Fund (IMF), the World Bank, and Indian regulators in order to form the country’s crypto policy. “We have reached out to institutional stakeholders within the country and outside. We are taking inputs from the IMF and the World Bank and incorporating these,” said an official from the Indian ministry of finance.
Indian Government is in talks with IMF and World Bank on Crypto Policy
The Mint published Thursday that Indian Finance Ministry officials were discussing cryptocurrency frameworks with various stakeholders, including the International Monetary Fund and World Bank as well as the Reserve Bank of India and Securities and Exchange Board of India.
“We have drafted a consultation paper on cryptocurrency,” one of the officials revealed, elaborating:
We have now reached out to all institutional stakeholder within and outside the country. We will incorporate the inputs received from IMF/World Bank.
“We will update the consultation paper based on that, and based on the responses by the RBI, SEBI, we will be updating it,” the official added.
The finance ministry’s consultation paper, which is expected to be finalized in the next six months, will cover how to deal with cryptocurrency, related risks, and its treatment as an asset class, the publication conveyed, noting that it will form the basis for India’s crypto policy.
Indian Finance Minister Nirmala Sitharaman repeatedly stated that there is no decision by the government to ban or regulate crypto. In the interim, all crypto transactions will be subject to 30% income tax.
The IMF’s mission chief for India, Nada Choueiri, told the publication that crypto assets posed significant risks, including to financial stability. Without commenting on India’s crypto policy specifically, she opined:
The misuse of crypto assets could also lead to money laundering and terrorist financing. Without effective regulation, crypto assets could be vulnerable to fraud and cyberattacks.
The IMF has been consulting with countries around the world to formulate a coherent policy for crypto assets.
Gita Gopinath (IMF Deputy Manager Managing Director) recently indicated that more regulatory work needs to be done regarding crypto and digital money. She added, “We’ve certainly seen an increase in the use of cryptocurrencies” before the Russia-Ukraine war, emphasizing that “it happen more in emerging markets than in others.”
Gopinath said in December: “Regulation is absolutely important for this sector. If people are using this as an investment asset, then the rules which are there for other investment classes should apply here as well.”
Bloomberg reports that India will adopt legislation to regulate cryptocurrencies once a global consensus has been reached regarding crypto assets.
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