Economic affairs secretary says regulation on crypto assets to be implemented in 2023

On February 4, Economic Affairs Secretary Ajay Seth stated that legislation governing crypto assets would be implemented this year.

The Budget, which was delivered on February 1, was devoid of any mention of crypto assets, despite the fact that Indians are rapidly investing in crypto money and non-fungible tokens (NFTs).

"The technology of crypto assets like blockchain and others can be used but its use in the financial sector can have several risks. In the course of this year, measures around crypto would be brought out," said Seth.

"In India, nobody is talking about using crypto as a currency. The risks are with using it as a token," he said.

In order to provide the crypto industry with the much-needed clarity on the future, Finance Minister Nirmala Sitharaman stated on February 3 that she will be looking at developing a global SOP (standard operating procedure) for regulating crypto assets in her upcoming G20 meeting with finance ministers and central bank governors.

On January 31, the cryptocurrency sector received its first-ever mention in the Economic Survey, primarily to draw attention to the sector's inherent dangers, high volatility, and the need for an international approach to regulation.

However, some industry participants were counting on India's G20 leadership this year to provide clarification on cryptocurrency.

The Reserve Bank of India (RBI) has repeatedly emphasised that the legalisation of cryptocurrencies could result in severe financial issues.

Shaktikanta Das, governor of the RBI, stated on January 13 that cryptocurrencies are poor gaming and can weaken the authority of the central bank if allowed to develop uncontrolled.

“If crypto is allowed in India, RBI will lose control over monitoring transactions. Crypto, masquerading as a financial asset, is a completely misplaced argument," Das said at BT’s Banking & Economy Summit in Mumbai.

Additionally, Das stated in December 2022 that if private cryptocurrencies are allowed to proliferate, they will be the source of the next financial disaster. Virtual currencies are not legal money, as the Union Finance Ministry and RBI warned earlier this year.

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