The Financial Intelligence Unit (FIU-India) is expected to approve two further offshore cryptocurrency exchanges by the conclusion of the fiscal year 2025, following a comprehensive evaluation of their adherence to anti-money laundering (AML) legislation.
FIU India's Plans
The FIU is presently evaluating four fresh requests from exchanges that were previously prohibited due to their failure to comply with India's rigorous AML requirements. The agency emphasized the importance of adhering to Indian financial regulations and intends to enforce penalties as needed, as demonstrated by the $2 million fine imposed on Binance earlier this year prior to its re-entry into the Indian market.
Changes in Crypto Taxation in India
In recent years, the Indian government's position on crypto has transformed, with an emphasis on striking a balance between fostering innovation and ensuring financial stability. In April 2022, India implemented a 30% tax on profits made from crypto investments and a 1% tax deducted at the source (TDS) on each cryptocurrency transaction.
Future Steps in Crypto Legislation
These measures were put in place to regulate the movement of digital currencies and combat unlawful activity. The imminent authorizations for supplementary offshore exchanges have the potential to intensify competition in the domestic market, provide Indian investors with a wider range of trading alternatives, and potentially augment liquidity. The Department of Economic Affairs (DEA) is anticipated to publish a consultation paper on crypto legislation by October, which is expected to have a significant impact on the development of India's long-term legal structure for digital assets.
The Indian government continues to seek a balance between regulation and fostering innovation in the crypto industry. The new agreements and authorization of new exchanges may have a significant impact on India's cryptocurrency market in the coming years.
Comments