The Director and Financial Counselor of the Monetary and Capital Markets Department of the IMF, Tobias Adrian talked about crypto regulation in India. He discussed the issue at the annual spring meeting of the World Bank and the International Monetary Fund. According to Adrian, regulating crypto assets is high on the Indian government’s agenda. He added that crypto regulation is taking place globally and the Financial Stability Board is also working on developing global standards that can be used for regulating the crypto space. He said that it would be helpful for India to adopt those.

Reports have indicated that the officials of the Ministry of Finance in India have also consulted with the World Bank as well as the IMF in order to develop their crypto policies. The Indian government is trying to figure out how they should treat crypto assets in the country. The IMF director also talked about the taxation policies that have been introduced for the crypto industry in India. He said that the changes that India has made for taxing crypto transactions are a welcome move. As of April 1st, crypto income in India is taxed at 30% and it does not permit loss deductions or offsets.

The implementation of this policy saw crypto trading volumes decline on exchanges all over the country. Soon, an additional tax deducted at source (TDS) of 1% would also go into effect. Adrian stated that the IMF was considering India in a very positive manner. He said that the country has a number of growth opportunities and recovery is imminent. He further noted that new developments and growth opportunities have generated a lot of excitement. The IMF director said that they emphasize inclusive growth, but they have a positive outlook where India is concerned.

The official also talked about India’s development of a central bank digital currency (CBDC). The Reserve Bank of India (RBI) is currently working on developing a digital rupee and Nirmala Sitharaman, the Finance Minister, has disclosed that it will be rolled out later this year. The Indian Prime Minister had previously said that it would simply be a digital version of the physical rupee and would revolutionize the fintech sector. According to the IMF director, the introduction of a CBDC could prove to be important for financial development and inclusion and they were keeping a close eye on what India is doing in this aspect.

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