India Review Its Crypto Stance Amid Global Policy Shift
India's rigid and inconsistent approach to crypto may be coming to an end as it reevaluating its stance
India, known for its stringent cryptocurrency regulations, is reportedly reevaluating its stance on cryptocurrency. The shift follows a global thaw in attitudes towards cryptocurrency, particularly spurred by recent developments in the United States under the Trump administration.
For years, India maintained a rigid and inconsistent approach, characterized by evolving laws and hefty taxation for those navigating the complex regulatory landscape. However, recent statements suggest a potential paradigm shift.
In 2023, former RBI Governor Shaktikanta Das forcefully opposed cryptocurrency in India.
He stated, “Crypto should be banned because it lacks underlying value. It’s gambling, pure and simple—100 percent speculation.”
Trump’s Admin Pro-Crypto Stance Trigger Changes
The United States, under President Trump, has exhibited a markedly pro-crypto stance. This includes the establishment of a cryptocurrency working group tasked with proposing new regulations and exploring the creation of a national cryptocurrency reserve.
Notably, this global trend has prompted India’s economic affairs secretary, Ajay Seth, to acknowledge a review of the country’s discussion paper on cryptocurrency.
Mr. Seth stated, “More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of usage, acceptance, and the importance of crypto assets. In that stride, we are reviewing the discussion paper once again.”
In December 2023, the Financial Intelligence Unit (FIU) issued show-cause notices to nine offshore crypto exchanges, including prominent players like Binance and Kucoin, for alleged non-compliance with local regulations. The FIU further requested the Ministry of Electronics and Information Technology to block these platforms’ URLs within India, underscoring the government’s assertive regulatory posture.
India Previous Crypto Stance
Despite the lack of comprehensive regulation, India introduced a 1% tax-deducted-at-source (TDS) on crypto transactions and a 30% capital gains tax in 2022. This taxation, implemented in the absence of a clear regulatory framework, has presented significant challenges for the crypto sector.
Industry stakeholders have consistently advocated for policy clarity and tax relief to foster growth within the Indian digital asset market, with limited success until this recent indication of a change in approach.
The potential easing of restrictions in India comes amidst renewed optimism regarding widespread cryptocurrency adoption in the U.S. and the approval of more token-linked financial products under Trump’s administration.
