India is close to finalizing a consultation paper on crypto after consultations with organizations including the World Bank and International Monetary Fund (IMF), according to a government official.

“Our consultation paper is fairly ready,” said Ajay Seth, secretary of the Finance Ministry’s Department of Economic Affairs. “We have gone through a deep dive consulting with not just the domestic and institutional stakeholders but also organizations like IMF and World Bank. We hope that we will soon be in a position to finalize our consultation paper. Simultaneously we are also beginning our work for some sort of a global regulation (to determine) what role India can play,”

It is unclear whether the consultation paper will influence the country’s crypto legislation, which has yet to be presented in parliament.

Speaking to reporters, Seth sought to clarify comments that appeared to hint at India possibly banning cryptocurrency.

“Whatever we do, even if we go to the extreme form, the countries that have chosen to prohibit, they can’t succeed unless there is a global consensus,” he had said.

Seth said his intention was to convey that irrespective of a country’s stance – banning cryptocurrencies or regulating them – “there has to be a broad framework and participation of all countries.”

“[The] prime minister in the Sydney conference made this point and he has made this point on more than one forum” Seth said, referring to Prime Minister Narendra Modi’s keynote address at the Sydney Dialogue that took place last November.

Speaking virtually at the 2022 World Economic Forum’s annual Davos conference, Modi reiterated his position: “Cryptocurrency is an example of the kind of challenges we are facing as a global family with a changing global order. To fight this, every nation, every global agency needs to have collective and synchronized action,” he said.

India’s crypto industry is suffering setbacks in the wake of a stiff new crypto tax, the rough local launch of crypto exchange Coinbase, a plunge in trading volumes, payment processors cutting off exchanges and the increased concern of the next phase of the new crypto tax – a 1% deducted-at-source levy that take effect July 1.

UPDATE (May 30, 15:57 UTC): Expands “Govt.” to “Government” in headline.


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