Indian Legislation: Crypto and Web3 Regulations Delayed by 18 Months, Confirms Senior Lawmaker

India is not anticipated to witness the unveiling of a dedicated legislative bill addressing the realms of crypto or Web3 until at least the middle of 2025, as per statements made by Jayant Sinha. Sinha, who serves as the Chair of the Standing Committee on Finance in India's Parliament and is a Member of Parliament affiliated with the ruling Bharatiya Janata Party (BJP), articulated this viewpoint during an interview at India Blockchain Week in Bengaluru. In his discourse, Sinha underscored the significance of adopting a well-balanced approach in the decision-making process involving regulators and policymakers.

Navigating Factors in Crafting Crypto Legislation

Sinha outlined three pivotal factors currently impeding the formulation of a bill specifically addressing crypto. Firstly, he drew attention to the dynamic evolution of use cases within the crypto sphere, emphasizing the necessity of identifying influential use cases customized to India. Secondly, he observed the ongoing evolution of global standards within the crypto industry, particularly in light of the impending elections in influential nations such as the U.S., the U.K., and India in 2024. Lastly, Sinha acknowledged the shifting dynamics of the industry following the collapse of FTX and regulatory measures taken against Binance.

Exercising caution and underscoring the importance of thorough deliberation, Sinha reiterated concerns expressed by India's central bank regarding the practicality of introducing crypto assets in a nation with capital controls. He drew a distinction between India's circumstances and those of economies like Singapore, Korea, or the U.S., which boast freely tradable currencies.

India's position on crypto garnered attention following its advocacy for the G20 to adopt global guidelines for crypto during its presidency in September 2023, notwithstanding the absence of its own legislative framework. Sinha hinted that India's standpoint on crypto may not manifest in the form of a bill in 2024. Instead, he proposed the notion that India could depend on a sequence of policy decisions, effectively constituting an implicit regulatory framework, aligning with the recommendations of the Financial Stability Board by the conclusion of 2025.

Approaching Crypto with Care

In an endeavor to stimulate participation, Sinha encouraged the Web3 community in India to put forth white papers or regulatory frameworks for evaluation. Despite India having instituted anti-money laundering regulations and a taxation structure for crypto, the cautious approach implies that the nation is maneuvering through the intricacies of crypto adoption with a meticulous focus on thoughtful consideration and alignment with global standards.

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