In a response to a question from the House of Commons, Minister of State of Finance Pankaj Chaudhary stated that the government is working with the G-20 nations to establish international coordination on the policy approach to crypto assets. Read More Business News on our website.
The response says that because crypto assets don’t have borders, international cooperation is needed to stop regulatory arbitrage. It makes the observation that significant international collaboration on the evaluation of the risks and benefits, as well as the development of common taxonomies and standards, is necessary for any law that regulates or prohibits crypto assets to be effective.
In a separate response, Finance Minister Nirmala Sitharaman stated that the Ministry of Electronics & Information Technology (MeitY) had released the National Strategy on Blockchain. This document provides and lays strategies and recommendations for the Indian Blockchain ecosystem to use the benefits of the emerging technology by focusing on technological and administrative aspects, and it was released in response to the allegations made in the Web3 report.
In addition, the Finance M stated that the government has periodically conducted the necessary consultations with stakeholders in this regard.
It also mentions that MeitY hosted a panel discussion on “Metaverse and Web3” during Digital India Week in July 2022, and the government helps the industry host conferences on Web3 and related technologies to better understand the ecosystem and its challenges.
The RBI has been warning users, holders, and traders of Virtual Currencies (VCs) about potential economic, financial, operational, legal, customer protection, and security risks associated with dealing in VCs, according to the response.
In accordance with Know Your Customer (KYC), Anti-Money Laundering (AML), Combating Financing of Terrorism (CFT), and other obligations under the Prevention of Money Laundering Act (PMLA), the RBI also advised its regulated entities to continue carrying out customer due diligence processes for transactions in VCs.
The response says that the RBI is making sure that the Foreign Exchange Management Act (FEMA)’s relevant provisions for overseas remittances are followed.
The minister stated in the response, “Therefore, any legislation for regulation or for banning can only be effective with significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.”