Despite tightening controls on money laundering and terror financing, India is not planning to regulate cryptocurrency transactions anytime soon.
The Indian government has stated that, although they are increasing scrutiny on crypto-related money laundering and terror financing, there are no immediate plans to regulate the buying and selling of cryptocurrencies.
During a parliamentary meeting on August 5, Pankaj Chaudhary, India’s Minister of State for Finance, answered questions about the country’s position on crypto regulations.
Chaudhary explained that India hasn’t done any research to find out how many people are using cryptocurrencies. He stated:
“Crypto assets or Virtual Digital Assets (VDAs) are unregulated in India and the government does not collect data on these assets.”
India’s stance on crypto regulation and taxation
While the Indian government began taxing cryptocurrency transactions and earnings since April 1, 2022, no move has been made to control the purchase of cryptocurrencies. India’s crypto law requires users to pay 30% tax on realized capital gains and a 1% TDS tax on transactions.
Chaudhary highlighted that India continues to work on anti-money laundering and countering the financing of terrorism in the crypto sector. At the beginning of January, India blacklisted several foreign crypto exchanges, including Binance, KuCoin, Bitget, Huobi, OKX, Gate. io and MEXC for failure in following the requirements of the laws within their jurisdictions.
However, the country has no plans to regulate crypto buying and selling. Chaudhary added:
“Currently, there is no proposal to bring legislation for regulating the sales and purchase of virtual digital assets in the country.”
He also reminded the audience that India had called upon all G20 members in 2023 to collectively address the menace of the illicit use of cryptocurrencies.
More recently, Binance’s attempt to re-enter the Indian market has been threatened by a $2 million fine following noncompliance with regulations. DGGI on August 6 sought 722 crore INR ($86 million) amount as unpaid tax from Binance.
Indian authorities had also served email notices to Binance offices in Seychelles, the Cayman Islands, and Switzerland, which was not heeded. Nevertheless, Binance did obtain a local lawyer for a legal solution to its tax problems at some point.
