India is yet to unveil its much-anticipated discussion paper on cryptocurrency policy, as the nation’s priorities have shifted. Initially, it was anticipated that the government would disclose its stance by September, yet other pressing issues have taken precedence. This article delves into the current status of India’s crypto policy and explores the reasons behind the prolonged delay.
Delays, Priorities, and More Delays
The release of a discussion paper on cryptocurrency was expected to provide guidance for future regulations, especially following consultations with the central bank and market regulators. However, the timeline for its release has become increasingly uncertain. Why has the timeline become so indefinite? The government is grappling with more immediate concerns. Consequently, the development of a crypto policy has been relegated to the background.
Competing Priorities in India
A significant factor contributing to the delay is the multitude of competing priorities that the Indian government is currently facing. Preparations are underway for the 2024 annual meetings of the International Monetary Fund (IMF) and the World Bank. Additionally, the nation is addressing the ongoing Russia-Ukraine conflict and the unrest in the Middle East. Compounding these issues, the election season is intensifying, and the Finance Ministry is preoccupied with budget planning. Amidst these challenges, the regulation of cryptocurrency is deemed a non-urgent issue.
Despite the recent $234 million hack of the Indian exchange WazirX, the government does not consider crypto legislation as pressing as it might have been two years ago. While the sector remains unregulated, India has imposed substantial taxes and requires cryptocurrency entities to register with the country’s Financial Intelligence Unit, aligning with global anti-money laundering standards.
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What to Expect?
Although there is a possibility that India might eventually release its discussion paper on cryptocurrency, the timeline remains uncertain. Currently, the government appears more focused on significant international and domestic issues. For those eagerly awaiting clear crypto regulations in India, patience will be necessary as the resolution of more urgent matters takes precedence.
