India is in the final stages of releasing a comprehensive discussion paper on virtual digital assets (VDAs), which is expected to guide the country’s future regulatory approach to crypto, sources told Business Today TV.
According to senior government officials, the paper is nearly complete and will be published shortly for public consultation. It will outline a range of regulatory options and incorporate insights from global best practices, notably the joint synthesis paper by the International Monetary Fund (IMF) and the Financial Stability Board (FSB).
“The discussion paper on virtual digital assets is being given finishing touches,” said a senior official involved in the drafting process. “Once out, it will invite stakeholder inputs to help shape India’s broader regulatory approach to crypto.”
The government’s approach continues to be cautious and calibrated, balancing innovation with economic and financial stability. A top official familiar with the matter reiterated that no hasty decisions will be taken. “No knee-jerk decisions will be made,” the official said, underscoring the complex and evolving nature of crypto assets and their potential macroeconomic implications.
Though India imposed a 30% levy on VDA gains in 2022, as well as a 1% TDS on transactions, authorities have time and again explained that it does not mean taxing is equal to legal recognition of cryptocurrency. Every crypto exchange that is conducting business in the country has to register with the Financial Intelligence Unit (FIU), in accordance with attempts to increase transparency and track suspicious transactions.
India has also played a significant role in shaping the global narrative on crypto regulation. During its G20 Presidency, the country actively pushed for a unified international framework. The G20 Leaders’ Declaration adopted in New Delhi last year endorsed the FSB’s recommendations on regulating crypto asset markets and stablecoins, rejecting blanket bans in favour of strong oversight mechanisms.
In a reply to Parliament in written form during the 2023 monsoon session, Minister of State for Finance Pankaj Chaudhary said that every jurisdiction, be it India or others, needs to analyze its own ecosystem and risks before deciding on a regulatory strategy.
The next discussion paper is likely to be an important milestone in India’s policy development on digital assets, seeking to balance encouraging innovation with protecting financial stability.