India's Digital Asset Regulations Under Review Amid Global Shifts

India is reassessing its digital asset regulations in response to global policy shifts, with the US' new measures being a significant influence. The government is refining its discussion paper and intends to adopt international standards. The review aims to reduce uncertainties in the digital asset markets and foster new economic opportunities.

India, a country known for its cautious approach towards digital assets, is reassessing its regulatory stance in response to global policy shifts. The US, in particular, has been a significant influence, with the government refining its discussion paper and adopting international standards to reduce uncertainties in the digital asset markets and foster new economic opportunities [1].

The US, under the leadership of former President Trump, introduced new policies, including the establishment of a cryptocurrency working group. These actions prompted India to reconsider its stance on cryptocurrencies, despite historically expressing concerns about the economic risks associated with such currencies [1]. Recent actions by the Indian government, such as show-cause notices to offshore exchanges and significant fines imposed on major platforms like Binance, indicate a potential openness to private virtual assets [1].

The Indian government's reputation for being harsh on cryptocurrencies might be changing. A regulatory sea change in the US, coupled with India's desire to remain competitive in the digital asset revolution, may result in a shift in policy. Economic Affairs Secretary Ajay Seth stated, "Digital assets don't believe in borders" [2]. This sentiment suggests that India does not want to get left behind in the global adoption of digital assets.

The Indian government currently levies a 30% capital gains tax on digital assets, with no distinction between gains made from long-term investment or short-term trading. However, recent actions indicate that the government may be open to reevaluating this stance to remain competitive in the global digital asset market [2].

References:

[1] vtnews.ai, India is reassessing its cryptocurrency regulations in response to changing global attitudes towards digital assets, September 21, 2021, https://vtnews.ai/stories/c5cb4c72-722c-493e-a789-2b9859e463f7

[2] cointelegraph.com, India may change crypto policy due to international adoption report, September 20, 2021, https://cointelegraph.com/news/india-may-change-crypto-policy-due-international-adoption-report