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Saturday, February 4, 2023

Indian Government Consulting With IMF, World Bank on Crypto Policy

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Indian Government Consulting With IMF, World Bank on Crypto Policy – In order to formulate India’s crypto policy, the government is engaging with the World Bank, the International Monetary Fund, and Indian regulators. “We’ve gone out to institutional stakeholders both inside and outside the country.” “We are adopting ideas from the IMF and the World Bank,” an official from the Indian finance ministry stated.

According to the Mint publication on Thursday, Indian finance ministry officials are discussing a framework for cryptocurrency with various stakeholders such as the World Bank, the International Monetary Fund, the Securities and Exchange Board of India, and the Reserve Bank of India.

One of the officials revealed, “We have drafted a consultation paper on cryptocurrencies,” adding:

“We’ve now reached out to institutional stakeholders both inside and outside the country. The World Bank and the IMF are providing input, which we are incorporating.”

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“We will amend the consultation document based on that, and we will update it based on the responses from the RBI and SEBI.”

Also Read: IMF Warns Russia Sanctions Threaten to Undermine US Dollar Dominance

According to the publication, the finance ministry’s consultation paper, which is scheduled to be finalized in the next six months, will include how to deal with cryptocurrencies, associated risk, and its treatment as an asset class, and would serve as the foundation for India’s crypto policy.

Nirmala Sitharaman, India’s finance minister, has stated on multiple occasions that the government has not determined whether to regulate or ban cryptocurrency. In the meantime, crypto income will be taxed at 30%, and all crypto transactions will be subject to a 1% tax deducted at source.

According to the IMF’s mission leader for India, Nada Choueiri, crypto assets pose considerable dangers, especially to financial stability. She opined, without particularly addressing India’s crypto policy:

“Terrorist financing, money laundering, and other illicit actions can all be carried out with cryptocurrency assets. The crypto assets ecosystem could face major consumer protection concerns, including fraud and cyberattacks, unless strong regulatory measures are established.” She also stated that the IMF is talking with other countries in order to develop an effective crypto asset policy.

On the regulatory front, according to IMF Deputy Managing Director Gita Gopinath, additional work is needed on crypto and digital money. “We’ve clearly seen an upsurge in the use of cryptocurrencies” before the Russia-Ukraine crisis, she noted, underlining that “it happens more in emerging markets than in others.”

Also Read: Parliament Member Says 1% TDS Will Kill Crypto Asset Class in India, Urges Government to Reconsider

“Regulation is definitely vital for this sector,” Gopinath stated in December. If this is being used as an investment asset, then the laws that apply to other investment classes should also apply here.”

Furthermore, Bloomberg reported on Friday that India will only draft cryptocurrency legislation after a global agreement on crypto assets is established.

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