India to Consider Country-Specific Characteristics and Risks in Regulating Crypto: Finance Ministry
The Indian government has said it will take into consideration the country-specific characteristics and risks when regulating cryptocurrencies, the country’s Finance Ministry said in a recent statement. The ministry’s comments were made in response to a consultation paper issued by the Inter-Ministerial Committee (IMC) on developing a regulatory framework for the digital currency industry in India.
The ministry noted that the IMC has drawn attention to the vulnerability of virtual assets, such as the risk of money laundering and terrorist financing, as well as the lack of customer protection that could arise from dealing with virtual currencies. In addition, the ministry noted that the paper had also raised the question of foreign exchange management and the need to ensure that any new regulations do not create an additional burden on the government or the public.
In its statement, the ministry said, “India will take into consideration the country-specific characteristics and risks before designing any regulatory framework for cryptocurrencies […] It is felt that the new technology used in cryptocurrency needs a closer examination, especially in the context of consumer and investor protection, market integrity, money laundering and terrorism financing, and also for maintaining the security of the system.”
The statement goes on to say that the Ministry of Electronics and Information Technology and the Reserve Bank of India have been working on the same and the Ministry of Finance has been tasked with providing necessary clarifications and suggestions to the IMC. The statement comes at a time when the Indian government is taking a firm stand against cryptocurrencies despite its growing popularity in the country. The government has been exploring the possibility of introducing a regulatory framework for the industry while also keeping an eye on developments related to cryptocurrency international markets.