India’s Cryptocurrency Paper Stalled by Global and Domestic Demands

India’s much-anticipated discussion paper on cryptocurrency policy has been delayed due to the government focusing on more immediate concerns. Initially expected in September, the paper was to outline India’s stance on regulating digital assets. However, officials have shifted their attention to other pressing matters, leaving no set timeline for its release, according to sources familiar with the situation.

Focus Shifts from Crypto to Global and Domestic Priorities

India, the world’s fifth-largest economy, has yet to establish comprehensive legislation for the cryptocurrency sector. While the nation imposes heavy taxes on crypto transactions and mandates registration with the Financial Intelligence Unit (FIU-IND), a formal policy remains absent. The delayed discussion paper was viewed as a critical step toward regulation. However, according to insiders, the government’s attention has been diverted by larger global events and domestic priorities.

With the International Monetary Fund (IMF) and World Bank annual meetings set for later this month, Indian officials have been engaged in multilateral discussions. The ongoing conflicts between Russia and Ukraine and the unrest in the Middle East have further shifted attention away from the cryptocurrency sector. Additionally, India’s Finance Ministry has been busy preparing for an election year, which includes managing two budget cycles: an interim budget in February and a full one post-election in July.

Despite recent setbacks in the crypto sector, including a $234 million hack of the WazirX exchange, India’s authorities do not view cryptocurrency regulation as an urgent matter. Officials seem to believe the situation is less critical than it was two years ago. However, the intent to release the discussion paper remains, though there is no current schedule for its publication.

As India navigates complex domestic and global challenges, the cryptocurrency sector will have to wait for a clearer regulatory framework.