India is developing a regulatory framework for cryptocurrencies based on joint recommendations from the International Monetary Fund (IMF) and the Financial Stability Board (FSB), and may enact legal legislation in the next 5-6 months. CREBACO CEO Siddharth Sogani, who has worked with government agencies and ministries, told Cointelegraph that the Indian government is working on a five-point crypto legislation with a global approach.
India recently concluded the G20 summit on a high note with several important economic announcements. However, the most noteworthy decision in the cryptocurrency community was the IMF-FSB joint recommendation on cryptocurrency regulation, which India and other G20 countries welcomed.
The International Monetary Fund-Financial Stability Board’s cryptocurrency recommendations call for regulation of the cryptocurrency market rather than a blanket ban. The IMF-Financial Stability Board recommendations are a set of regulatory guidelines/recommendations upon which G20 countries can develop independent but collaborative crypto legislation.
Cointelegraph reached out to blockchain analytics firm CREBACO, which advises several G20 committees and countries, to gain insight into India’s approach to cryptocurrency. The company’s CEO Sogani told Cointelegraph that India is currently developing a five-point regulatory approach, focusing on global cooperation on certain aspects such as cryptocurrency taxation, based on meetings with government officials.
Speaking about the five-point framework, Sogani noted that the government’s focus is on:
- Establish advanced know-your-customer (KYC) for cryptocurrency companies that covers the Foreign Account Tax Compliance Act (FATCA) and existing anti-money laundering standards.
- Cryptocurrency platforms are required to issue proof of reserve audits to regulators in real time.
- Unify tax policies across countries.
- Under the guidance of the Reserve Bank of India (RBI), cryptocurrency exchanges can obtain similar status as authorized dealers (similar to banks).
- Key positions may be mandatory, such as a cryptocurrency platform’s Money Laundering Reporting Officer (MLRO).
Sogani noted that the world has realized the futility of banning cryptocurrencies and some countries are turning to regulatory approaches rather than outright bans. Countries such as the United States and Europe have enacted some specific cryptocurrency regulations, while India has taken the taxation route. He added:
“Regulation is inevitable and this ecosystem has become very powerful without regulation. Just imagine how much better it would have grown with proper regulation. Additionally, a regulated market would reduce scams and Risks of illegal activities.”
India has been calling for a global approach to cryptocurrency regulation for some time, with Prime Minister Narendra Modi reiterating the same at the recently concluded G20 summit.One of the top executives of the Ministry of Finance comfirmed They have adopted the IMF-FSB’s cryptocurrency recommendations and will focus on developing relevant regulations in the coming months.
Related: India G20 confirms ‘active discussions’ around global crypto framework
The finance minister said the advice from the International Monetary Fund and the Financial Stability Board provided a good “framework to decide our own path forward”. The foundation is ready, but beyond that, we have a decision to make in the next few months before we get the call. ”
The official also made it clear that banning cryptocurrencies is no longer an option, noting that “if you want to ban it (cryptocurrency), then ban it. But if other countries don’t ban it, it’s extremely difficult for one country to ban it.” . ”
India currently does not have any specific crypto regulations, although the country will impose a 30% tax on crypto gains in 2022. However, the joint crypto proposal and the finance ministry’s assurance that the crypto framework could become a strong piece of legislation in India. The coming months are an optimistic sign for the country’s crypto industry.
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