Radhika Parashar
A finance panel backed by the Indian government has decided to conduct a crypto-focused study in the coming months. The development comes just days after the parliament was informed that India was not hasting in drafting regulations to oversee the Virtual Digital Assets (VDA) sector.
The Standing Committee on Finance plans to conduct a detailed examination of the VDA industry, an official document showed on Thursday, August 14. The period between 2024 and 2025 will be the focus point for this analysis.
While elaborate details on what this assessment entails remained undisclosed, the development triggered optimism among the Indian crypto players.
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Sumit Gupta, for instance, the CEO of the recently hacked CoinDCX exchange lauded the step on X. “This is a good positive development for the sector!” Gupta wrote.
Members of India’s crypto community also shared the development, expressing that this could be a sign that India is ready to take a bullish step towards embracing VDAs.
The timeline of the beginning and completion of this analysis remains undisclosed for now.
India is touted among a key market for crypto, with companies like Binance and Coinbase among others having marked their presences in.
In 2022, the finance ministry in India announced a tax of 30 percent on crypto income and a one percent TDS reduction at each step of the transaction — to maintain a trail of the largely private crypto transactions. While the stakeholders of the industry have repeatedly urged for a revision of this tax rate, the authorities have held steady on the exiting regime.
Complying with KYC, anti money laundering, and counter terror financing rules are among other rules that crypto firms have to follow to tap into the world’s most populated nation. New VDA firms looking to enter the market first need to complete registrations with the Financial Intelligence Unit (FIU) of India.
In the lack of comprehensive crypto rules, the industry remains threatened and the investors remain largely unprotected against financial risks.
Over the last few months, the calls for clear regulations around crypto grew louder from the Indian courts. In May, a Supreme Court bench had highlighted the urgency of crypto regulations, citing delays in finalizing sentences in crypto-related cases. Recently, Delhi High Court Justice Girish Kathpalia also raised flags against the potential impacts of unmonitored crypto activities on the Indian economy.
The finance ministry of India has been working on crypto discussion paper since July 2024. The report is supposed to clarify India’s stance on crypto but there have been no updates on its release so far.
Since its G20 presidency in 2023, India has been calling for a global cooperation on formulating internationally uniform crypto rules. While India awaits, regions like the U.S., the UAE, and the EU have already established clear guidelines to oversee the crypto sector while ensuring growth.
