Indian Government in Talks With IMF, World Bank, RBI, SEBI on Crypto Policy

Indian Finance ministry officials are discussing a framework for cryptocurrency with different stakeholders including the International Monetary Fund (IMF), the World Bank, and the Reserve Bank of India (RBI) the Mint publication reported Thursday. 

"We have drafted a consulation paper on cryptocurrency" one of the officials revealed elaborating.

"Now, we include reached out to institutional stakeholders within the country and outside. We are taking inputs from the IMF and the World Bank and incorporating these."

"We will update the consultation paper based on that, and based on the responses by the RBI, SEBi we will be updating it."

The Finance ministry's consultation paper, which is expected to be finalized in the next six months, will cover how to deal with cryptocurrency, related risks, and its treatment as an asset class the publication conveyed noting that it will form the basis for India's crypto policy.

Indian Finance Minister Nirmala Sitharaman has said on different occasions that the government has not decided whether to regulate or ban crypto. However, in the meantime, crypto income will be taxed at 30% and a 1% tax deducted at source (TDS) will be levied on all crypto transactions.

The IMF's mission chief for India, Nada Choueiri told the publication that crypto-assets posed significant risks, including to financial stability, Without commenting on India's crypto policy specifically she opined:

"Crypto assets can also be misused for money laundering, terrorist financing, and other illegal activities. Unless effective regulatory measures are implemented, the crypto assets ecosystem could face serious consumer conservation challenges such as fraud and cyberattacks."

Read: Indian Regulator SEBI Proposes Banning Public Figures From Endorsing Crypto Products