India Reassesses Crypto Regulations Amid Global Policy Shifts

• India is reassessing its crypto regulations in response to evolving global policies and regulatory shifts in multiple jurisdictions.
• The U.S. has introduced new crypto regulations under former President Donald Trump, which contrasts with Biden’s previous stance.
• India’s current 30% tax on crypto gains and 1% TDS remains controversial, with ongoing industry calls for policy adjustments.

India is reviewing its stance on cryptocurrency regulations as international policies evolve, Economic Affairs Secretary Ajay Seth confirmed. The country is reexamining a discussion paper on digital assets to align with changing global perspectives. This reassessment follows shifts in regulatory approaches across multiple jurisdictions.

Regulatory Changes in the United States Influence India’s Review

President Donald Trump issued an executive order which led the United States to establish unique cryptocurrency regulations. The executive order indicated rising acceptance of digital assets within the United States under President Donald Trump after Biden’s administration displayed opposing views. 

Additionally, key regulatory leadership changes in the U.S. have indicated potential policy shifts. The resignation of SEC Chair Gary Gensler, known for strict enforcement measures, has fueled expectations of a more flexible approach to crypto oversight. 

The appointment of a crypto czar and a pro-bitcoin Treasury Secretary further signals regulatory adjustments that could shape the industry’s future.

Bitcoin’s Role in Economic Policy Expands

Discussions have emerged in the U.S. regarding the classification of Bitcoin as a strategic reserve asset. Several states have introduced legislation to recognize Bitcoin in this capacity, positioning it as a financial security tool. 

Other countries are also considering similar measures, indicating a broader trend of Bitcoin integration into national economic frameworks. Despite the reassessment, uncertainty remains regarding India’s crypto regulations. The government had planned to release a discussion paper on cryptocurrencies in September 2024. 

However, the ongoing review has cast doubts on the timeline. The latest national budget did not address cryptocurrencies despite calls for tax policy adjustments from industry participants. Currently, India imposes a 30% tax on crypto gains and a 1% tax deducted at source (TDS), a policy widely criticized for discouraging market participation and innovation.