India’s Virtual Digital Asset Regulatory Framework: Ongoing Development and International Collaboration
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Indian Crypto Regulations: No Fixed Timeline for Virtual Digital Asset Regulations
The Minister of State for Finance, Pankaj Chaudhary, has recently informed the Lok Sabha that the government has not set a definitive timeline for establishing a regulatory framework for Virtual Digital Assets (VDAs) in India. This information was provided in response to queries from two Members of Parliament regarding the regulatory framework and its timeline.
Chaudhary highlighted the borderless nature of VDAs, emphasizing the need for international collaboration to prevent regulatory arbitrage. The Minister pointed out that a comprehensive regulatory framework for VDAs would require alignment with international standards. This comes as no surprise, given the global shifts towards digital assets and the importance of cooperation among nations.
The Indian authority is preparing to introduce a regulatory framework for digital assets, following recent cyber attacks on local exchanges. In March 2023, Virtual Digital Assets were brought under the purview of the Prevention of Money Laundering Act, 2002 (PMLA). The motive behind this move was to monitor transactions related to digital assets and ensure that income derived from VDAs is subject to taxation.
It’s worth noting that India’s G20 presidency has led to the International Monetary Fund (IMF) and Financial Stability Board (FSB) presenting a synthesis paper outlining a proposed ‘G20 Roadmap on Crypto Assets’. This document addresses risks specific to Emerging Markets and Developing Economies (EMDEs). Chaudhary stated that all jurisdictions, including India, are expected to evaluate these risks and collaborate with standard-setting bodies and G20 to determine appropriate regulatory measures.
The demand for a regulatory framework has become stronger after the leading Indian crypto exchange, WazirX suffered a massive cyber attack on July 18, resulting in over $230 million in user funds being lost.
Source: www.cryptonewsz.com
