By early 2023, the Indian government hopes to submit its stance on the legitimacy of cryptocurrencies to the Financial Action Task Force (FATF) for a “mutual evaluation”.
A government official stated, “The revenue department has already sent their views and the Department of Economic Affairs has now been tasked to prepare a detailed response on India’s stance on the legality of cryptocurrency.”
The official further added, “One of the questions that we have to respond to is on the legality of cryptocurrencies since we have already started to tax them. We will finalize our responses by February-March 2023. We have to respond to the FATF by May.”
The country’s efforts to stop money laundering, terrorism financing, and the spread of weapons of mass destruction (WMD) are evaluated in the FATF Mutual Evaluation Report.
A consultation paper on virtual digital assets (VDAs) is now being prepared, and a team effort will be made to determine whether VDAs are lawful or not, according to past statements from the Department of Economic Affairs.
The government is actively gearing up to provide clarity on crypto legitimacy, as more reports flew in that India will decide on its crypto trade stance after the Financial Stability Board’s report is published in October.
This FSB report will reportedly help the government decide whether to ban crypto transactions through wallets or not. The report will have guidelines on how the legal contours of India’s crypto trade will take shape.
The necessity for an unambiguous agreement on the legality of cryptocurrencies was also briefly mentioned at the most recent meeting of the Financial Stability and Development Council (FSDC), presided over by Union Finance Minister Nirmala Sitharaman.
Nirmala Sitharaman also spoke with Kristalina Georgieva, the managing director of the International Monetary Fund, about the issue. The Indian Finance Minister also urged the IMF to lead crypto regulation.