The Central Government said that cryptocurrency will be subject to India’s money laundering regulations. According to the notification, money laundering rules will apply to the trade of virtual digital assets and fiat currencies, the exchange of one or more kinds of virtual digital assets, and the transfer of digital assets.
The notification further stated that the safeguarding or administration of virtual digital assets, as well as involvement in financial services relating to the offer and sale of virtual digital assets, will be covered. This policy is intended to help investigative authorities carry out their proceedings against cryptocurrency organisations, with the Enforcement Directorate (ED) and Income Tax Department already looking into numerous such cases involving corporations that manage bitcoin exchanges and transactions.
According to a study, extending India’s money laundering legislation to cryptocurrencies will offer authorities more jurisdiction in monitoring the transfer of these assets outside the country’s boundaries.
Even though the country’s Central Bank has often warned against the usage of cryptocurrency, India has failed to finalise legislation and regulations. The Reserve Bank of India has said that cryptocurrencies should be banned as they are akin to a Ponzi scheme. Extending India’s money laundering rules to cryptocurrencies will give authorities greater authority in monitoring the transfer of these assets beyond the country’s borders. As part of its G-20 leadership, the Narendra Modi Government has pushed for a broader global consensus on dealing with the hazards posed by cryptocurrencies.
