India to Finalize Stance on Legality of Cryptocurrency by Q1 2023: Report

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The Indian government is reportedly planning to finalize its stance on the legality of cryptocurrencies by the first quarter of next year. To become compliant with the Financial Action Task Force (FATF). “We will finalize our response by February-March 2023. We have to respond to the FATF by May,” a government official said.

India finalizing crypto currency

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Business Today reported on Monday that the Indian government is finalizing its stance on the legality of cryptocurrencies to submit its response to the Financial Action Task Force (FATF) for a “mutual assessment” of the country in early 2023.

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“The Department of Revenue has already sent its views and the Department of Economic Affairs is now tasked to prepare a detailed response to India’s stand on the legality of the cryptocurrency,” a government official said.

The FATF Mutual Assessment is an “in-depth country report that analyzes the implementation and effectiveness of measures to combat money laundering and terrorist financing,” its website details.

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The government official further told the publication:

One of the questions we have to answer is on the legality of cryptocurrencies, as we have already started taxing them. We will finalize our responses by February-March 2023. We have to respond to FATF by May.

In addition, the Financial Stability Board (FSB) report is expected in October. Outlook India on Monday quoted a senior government official as saying that it would help the Indian government decide whether to ban cryptocurrency transactions or provide a legal framework to deal with crypto trading in India.

The officer was quoted as saying:

We are waiting for the (FSB) report which will be important from the point of view of crypto law. We are also hoping that this addresses how to deal with wallet transfers (of crypto).

“We will consider whether to ban wallet transfers based on what is suggested in the report. The law part is still being worked out. When we taxed it (in Budget 2022), we made it clear that the law was still a work in progress. This report will help in addressing the aspect of law to a great extent,” the official further elaborated.

India is currently not FATF-compliant on crypto assets as global money laundering and terrorist financing watchdogs require countries to have a clear stance on the legality of crypto assets to comply.

Indian Finance Minister Nirmala Sitharaman recently chaired a meeting of the Financial Stability and Development Council (FSDC) to discuss issues related to crypto assets. The Council stressed the urgent need for a clear consensus on the legality of cryptocurrencies.

The Finance Minister recently had a meeting with International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, where she urged the IMF to take a leading role in regulating crypto assets.

Do you think India will ban crypto? Let us know in the comments section below.

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