India is reconsidering its cryptocurrency regulation, sparking interest from major global crypto companies.
Changes in India's Policy
Ajay Seth, Secretary of India's Department of Economic Affairs, stated that the government is reassessing its stance on crypto regulations. Initially, India planned to release a consultation paper following its G20 presidency in 2023, but recent global shifts, including the pro-crypto stance of U.S. President Donald Trump, have prompted a policy review.
Response from Major Crypto Firms
India's stringent tax regime, including a 30% tax on crypto income and a 1% tax deducted at source, has significantly impacted the local crypto industry. Trading volumes on Indian exchanges plummeted, leading to several key players exiting the market. However, with a potential policy shift on the horizon, major crypto firms are making moves to re-enter the market. Coinbase has registered with India's Financial Intelligence Unit to launch its retail trading platform, following similar moves by Binance, Bybit, and KuCoin, indicating growing optimism about India's regulatory evolution.
Global Trend in Crypto Regulation
The global trend towards more favorable crypto regulations is becoming clearer. Countries like Hong Kong, Australia, and the UAE have recently introduced frameworks to attract digital asset firms. In February, Hong Kong introduced regulatory measures for tokenization and digital asset exposure in authorized funds while approving exchange-traded funds (ETFs) that invest in digital currencies. In March, Australia adopted a comprehensive four-pronged approach with governance standards, licensing requirements for service providers, and stablecoin capital requirements.
India's reconsideration of its policies reflects a global trend towards more favorable crypto regulations, which could attract the interest of global crypto firms.
