India to Release Discussion Paper on Crypto Regulation Soon

India is preparing to unveil a detailed discussion paper on virtual digital assets (VDAs), aiming to define the country’s future regulatory direction for cryptocurrencies. According to senior government officials, the paper is nearly finalized and will soon be shared for public consultation.

The document will present various regulatory frameworks and draw on international best practices, particularly referencing the collaborative report by the International Monetary Fund (IMF) and the Financial Stability Board (FSB).

“We’re currently finalizing the discussion paper,” a senior official involved in the drafting process noted. “It will soon be open for stakeholder feedback to shape a balanced and effective regulatory strategy.”

The Indian government continues to follow a measured and cautious approach to crypto policy — promoting innovation while addressing financial and economic stability concerns. Officials reiterated that decisions would be well-considered, acknowledging the complexity and evolving nature of digital assets.

Although India implemented a 30% tax on VDA profits and a 1% TDS on transactions in 2022, authorities have clarified that taxation does not imply formal recognition or legalization of cryptocurrencies. Exchanges operating in India are required to register with the Financial Intelligence Unit (FIU) to enhance transparency and monitor potentially suspicious activities.

India has also emerged as a key voice in shaping the global crypto policy landscape. During its G20 presidency, India advocated for a unified global regulatory framework. The G20 Leaders’ Declaration, signed in New Delhi, endorsed the FSB’s proposals for regulating crypto assets and stablecoins, rejecting outright bans in favor of robust oversight mechanisms.

In a past parliamentary session, Minister of State for Finance Pankaj Chaudhary emphasized the need for each country to evaluate its unique risk landscape before finalizing its regulatory approach.

The forthcoming discussion paper is expected to be a significant milestone in India’s journey toward a clear, innovation-friendly, and risk-aware digital asset regulatory framework.