Panel May Seek Tighter Monitoring of Crypto Transactions
The government has previously told Parliament that crypto assets are inherently borderless and require international collaboration to prevent regulatory arbitrage.
New Delhi: A parliamentary panel may recommend tighter monitoring of cryptocurrency transactions and wider consultations on the legal treatment of digital assets, a source aware of the matter said.
The Parliamentary Standing Committee on Finance, headed by BJP MP Bhartruhari Mahtab, has examined virtual digital assets (VDAs), a legal category covering cryptocurrencies and non-fungible tokens (NFTs), for more than a year.
It has held more than half a dozen meetings on the subject and is preparing its report for submission to the Lok Sabha Speaker.
The committee is also likely to recommend that the government deploy the latest technology to strengthen monitoring of such assets, the source said.
The government has previously told Parliament that crypto assets are inherently borderless and require international collaboration to prevent regulatory arbitrage.
It has maintained that legislation to regulate or ban VDAs can be effective only through international cooperation to assess their risks and benefits and develop common terminology and standards.
Last month, the finance ministry cautioned the public that crypto products and NFTs are unregulated and can be highly risky. It warned that there may be no regulatory recourse for losses arising from such transactions.
VDA service providers, however, are subject to anti-money-laundering requirements. They were brought under the Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) framework through provisions of the Prevention of Money Laundering Act, 2002, in March 2023.
The director of the Financial Intelligence Unit-India (FIU-IND), which operates under the finance ministry, recently issued non-compliance notices to 15 VDA service providers under the Act.
Cryptocurrency is a digital currency that uses cryptographic techniques to verify transactions and generally operates independently of a central bank.
