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The Indian government plans to finalize its position on the legality of cryptocurrency by the first quarter of next year to comply with the Financial Action Task Force (FATF). “We will finalize our responses by February-March 2023. We must respond to FATF by May,” a government official said.

India finalizes position on crypto

The Indian government is finalizing its position on the legality of cryptocurrency to submit its response to the Financial Action Task Force (FATF) for the country’s “mutual assessment” by early 2023, Business Today reported on Monday.

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

The FATF mutual evaluations are “in-depth national reports analyzing the implementation and effectiveness of measures to combat money laundering and the financing of terrorism”, details its website.

The government official further told the publication:

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

In addition, a report from the Financial Stability Board (FSB) is expected in October. This will help the Indian government decide whether to ban cryptocurrency transactions or provide a legal framework to deal with crypto trading in India, Outlook India reported on Monday, citing a senior government official.

The manager reportedly said:

We are waiting for the report (FSB) which will be important from the point of view of crypto legislation. We also hope it explains how to handle (crypto) wallet transfers.

“We will consider whether to prohibit portfolio transfers based on what the report suggests. The legislative part is still being worked on. When we taxed it (in the 2022 budget), we made it clear that the legislation was still in progress. This report would help address the legislative aspect to a large extent,” the official added.

India is currently not FATF compliant on crypto-assets as the global money laundering and terrorist financing watchdog requires 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) where issues relating to crypto-assets were discussed. The council stressed the urgent need for a clear consensus on the legality of cryptocurrencies.

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

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

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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