RBI has been regularly cautioning users about the inherent risks of crypto.
On Monday, in the Lok Sabha, the Lower House of the Parliament of India, the Finance Minister was asked whether the Reserve Bank of India (RBI) has proposed any mechanism for the trading of crypto assets.
Minister of Finance (State), Mr. Pankaj Chaudhary filed a written reply which said that RBI has not made any such proposal.
Further, it was also asked if Government proposes to define cryptocurrencies as securities or other financial instruments. Moreover, has the Government taken any steps to formulate transparent, regulatory measures for cryptocurrencies?
Since crypto is unregulated, the legal framework for the sector will be finalised only after all aspects are consulted with experts and stakeholders.
Regarding the awareness of the risk among people, Mr. Chaudhary answered that RBI has been cautioning users vide public notices on December 24, 2013, February 01, 2017, and December 05, 2017, informing people about the potential economic, financial, operational, legal, customer protection and security-related risks.
With the circular dated May 31, 2021, RBI advised its regulated entities to continue to carry out customer due diligence processes for transactions in VCs, in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), obligations under Prevention of Money Laundering Act (PMLA), 2002, etc.
The arrival of a new asset in the fiscal policy of the country means that many laws will be amended or formulated. The new crypto tax regime is still unclear. More updates are expected to come on a regular basis in the upcoming Financial Year.
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