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Indian government joins hand with World Bank and IMF to finalise crypto consultation paper

A top bureaucrat from the Government of India, Economic Affairs (DEA) Secretary Ajay Seth said that DEA had completed work on the consultation paper that would decide India’s position on cryptocurrencies. 

Work on the Consultation paper on cryptocurrencies with World Bank and IMF

He further added that the World Bank and the International Monetary Fund both have collaborated on the consultation paper and the paper is about some form of worldwide legislation. He was speaking at an event organised by the Ministry of Labour and Employment on Monday.

After the completion of a consultation paper on cryptocurrencies from the DEA, it will be forwarded to the federal government. If the proposal is implemented in India, the global regulatory consensus on digital assets (cryptocurrencies) may be closer.

India’s hard stand on cryptocurrencies

In recent years, India has adopted an uncompromising stance against cryptocurrency. In 2017, the Reserve Bank of India (RBI) and the Ministry of Finance compared digital currencies to Ponzi schemes for conventional banks and lenders.

The top leader of India, i.e. Indian Prime Minister Narendra Modi said about cryptocurrencies in an online virtual speech to the World Economic Forum that cryptocurrency is a global issue that demands joint and synchronised action” from all national and international organisations.

Recent developments in the crypto sector in India

As per sources, the Securities and Exchange Board of India (SEBI) has recommended Government to prohibit prominent public personalities, including celebrities and athletes, to support cryptocurrency products. In addition, SEBI also recommended that the crypto advertisements should clearly disclose any legal infractions.

Earlier in the middle of last month, Coinbase CEO Brian Armstrong said that the company’s trading operation in India was shut down owing to “informal pressure” from the Reserve Bank of India.

According to sources, the India Central Board of Direct Tax (CBDT) is planning to charge a 20% tax on interest received through decentralised finance (DeFi) assets also. Earlier, in the budget 2022 announcement, the Government has imposed a 30% tax on returns or profits earned by virtual digital assets from 1 April 2022. In addition, all such transactions are subject to a 1% TDS.

What the crypto industry needs in India

Uncertain government rules and regulations, and unpredictable markets, have made it difficult for the Indian crypto industry to operate. Since the Indian government appears to lack a clear policy on cryptocurrencies, the industry had hoped for crypto legislation. 

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