Reportedly, the government of India is discussing the crypto regulatory efforts in the parliament, but the date for the introduction of any framework is still uncertain.
India is a very big jurisdiction for the crypto sector. As per survey reports, currently, the highest number of crypto traders are basically from India. In terms of total crypto assets holding valuation, India is still lagging very far from the US crypto investors. Currently, the crypto companies are providing crypto services under a partial regulatory framework. Cryptocurrencies have been regulated under the Prevention of Money Laundering Act (PMLA) since March 7, 2023. At the beginning of this year, many crypto companies faced regulatory heat for not registering with the Indian FIU unit.
On 16 Dec 2024, Some discussions in the parliament touched the topic related to crypto regulation in the Indian jurisdiction.
Discussion on this matter confirmed that the lawmakers are working on the regulatory framework, but due to the decentralised nature of cryptocurrencies, they are also required to collaborate with the financial regulators of foreign countries to prohibit illicit crypto transactions or money laundering activities.
For this regulatory framework, A discussion paper may be published to outline regulatory stances, but no specific timeline is set for the same.
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Before this, the Indian leaders had already shown their global crypto regulatory efforts during the G20 summit hosted by India.
In the current scenario, the Indian financial regulators are focused on making a perfect way to regulate the crypto space to protect the crypto investors & simultaneously give better room for the crypto sector to evolve.
Because of the decentralised nature of cryptocurrencies, the financial regulators are not in that phase where they can claim to provide investor protection.
India & defunct crypto exchanges
Already FIU-registered crypto trading platforms WazirX & Bitbns collapsed badly following a cyber hacking incident. Many of the customers belonging to this platform raised the questions of why the Indian financial regulators are asking for registration, for the crypto companies & why they are taking taxes from the crypto traders while they’re ignoring crypto-related incidents.
Read also: Bitget crypto exchange secures regulatory approval in El Salvador, Bitget token pumps sharply