Govt engaging with G-20 countries to build international coordination on crypto assets policy: MoS for finance

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The government is engaging with G-20 countries to build international coordination on policy approach to crypto assets, Minister of State of Finance Pankaj Chaudhary has said in a parliamentary response.

According to the response, since crypto assets are borderless they require international collaboration to prevent regulatory arbitrage.  It notes that any law for regulation or banning (crypto assets) can be effective only with significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.

In a separate response, Finance Minister Nirmala Sitharaman said that the Ministry of Electronics & Information Technology (MeitY) has released the National Strategy on Blockchain, which provides strategies and recommendations for the Indian Blockchain ecosystem to use the benefits of the emerging technology by focusing on technological and administrative aspects.

The FM’s response also said that the government has undertaken necessary consultations with stakeholders from time to time in this regard.

It further notes that during Digital India Week in July 2022, MeitY had organised a panel discussion on “Metaverse and Web3”, and the government supports the industry in organising conferences on Web3 and related technologies for understanding the ecosystem and their challenges.

According to the response, the RBI has been cautioning users, holders and traders of Virtual Currencies (VCs) that dealing in VCs is associated with potential economic, financial, operational, legal, customer protection and security-related risks.

Further, the RBI also advised its regulated entities to continue to carry out customer due diligence processes for transactions in VCs, in line with Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), obligations under Prevention of Money Laundering Act (PMLA), 2002, etc.

According to the response, the RBI is ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.