"India Reevaluates Crypto Stance Amid Global Shifts, Delays Discussion Paper"

India is reevaluating its stance on cryptocurrency regulations, taking cues from the changing global attitudes and the recent executive order by U.S. President Donald Trump. Economic Affairs Secretary Ajay Seth has confirmed that India's review considers the shifting positions of multiple jurisdictions regarding cryptocurrency usage and acceptance. This reassessment has led to a delay in the release of a cryptocurrency discussion paper originally scheduled for September 2024.

Seth stated, "More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of the usage, their acceptance, where do they see the importance of crypto assets. In that stride, we are having a look at the discussion paper once again." The review comes in response to Trump's executive order, which tasks the Treasury and other federal agencies with reviewing U.S. regulations affecting the digital asset sector.

Despite India's stringent regulatory environment, which includes a 30% capital gains tax and 1% TDS on transactions, cryptocurrency investment has grown substantially among Indian investors. The country maintains tight oversight, with the Financial Intelligence Unit taking action against non-compliant exchanges. In December 2023, the FIU issued notices to nine offshore cryptocurrency platforms, while Binance paid a $2.25 million fine in June 2024 to resume Indian operations.

The Reserve Bank of India has consistently expressed concerns about private digital currencies, reiterating its cautious stance in its December 2024 Financial Stability Report. However, India's market regulator has suggested a multi-regulator approach to cryptocurrency oversight, indicating a potential openness to private virtual assets among some authorities. The current tax structure remains a barrier for crypto traders, with no provisions for offsetting losses and mandatory deductions on transactions exceeding ₹50,000 per financial year. The regulatory framework involves multiple bodies, including the Reserve Bank of India (RBI), Ministry of Finance, and SEBI.

India's complicated history with crypto dates back to 2013, when the RBI issued warnings about the risks of cryptocurrencies. In 2017, as the digital asset class gained popularity, the RBI's concerns about money laundering and investor protection led to greater scrutiny. The following year, the RBI imposed a banking ban on crypto exchanges, cutting off access to the banking system for the sector. This severely impacted India's crypto market, until the Supreme Court