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India’s Finance Minister States Crypto Assets Are Appropriate Solely for Trading and Speculation, Not for Currency Transactions.
Bitcoin’s all-time high exceeding $72,000 has not altered the Indian government’s stance on cryptocurrency, as stated by Finance Minister Nirmala Sitharaman.
During the India Today Conclave 2024 on Friday, Sitharaman reiterated that the government holds the view that crypto assets are only appropriate for trading and speculation. However, she stressed that they cannot serve as currencies.
“Currencies must be issued by the government or the central bank of the time,” she remarked. “And it remains unregulated in India. This is why we deemed it necessary to bring it to the G20 forum.”
Indian Finance Minister Highlights Global Crypto Regulation Gap
The Finance Minister explained the rationale behind India’s wait for a broader regulatory framework. She noted that the government’s position stems from the concern that if one nation enacts regulations on cryptocurrencies while others do not, it could create a loophole for illegal activities such as money laundering, drug trafficking, or terrorism financing.
Consequently, the government is promoting discussions on this issue at the G20 level. “It has been very well received, and I’m confident that a framework will emerge,” she stated.
Indian Prime Minister Narendra Modi initially voiced support for the creation of a global regulatory framework for cryptocurrencies during the B20 summit in August.
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Subsequently, Sitharaman underscored the necessity of international cooperation on crypto regulations following the G20 Finance Minister-Central Bank Governor meeting in Morocco, which occurred during India’s presidency.
The leaders reached an agreement on a roadmap aimed at fostering macroeconomic and financial stability through the implementation of this policy framework. It highlights the importance of effectiveness, flexibility, and coordination among the participating countries.
India’s Crypto Market Thrives Despite Tax Challenges
India, once perceived as less receptive to cryptocurrencies, is now witnessing a shift in perspective.
Despite encountering obstacles such as a steep tax rate (30%) on profits, Indian citizens managed to generate over $1 billion in estimated gains last year, according to data from Chainalysis.
Moreover, in 2023, India became the second-largest crypto market globally, with transactions exceeding $250 billion.
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