India's Parliamentary Committee Eyes Stricter Crypto Monitoring

A parliamentary committee in India is considering stricter monitoring of cryptocurrency transactions and wider consultations on the legal treatment of digital assets, according to a person familiar with the matter. The Parliamentary Standing Committee on Finance, headed by BJP MP Bhartruhari Mahtab, has been examining the sector for over a year, holding more than half a dozen meetings on the issue. The committee is now preparing its report for submission to the Lok Sabha Speaker. One of the recommendations being considered is the deployment of newer technology to strengthen monitoring of digital assets. India currently does not recognize cryptocurrency as an asset and lacks a comprehensive regulatory framework for digital assets.

The government has previously stated that crypto assets are inherently borderless and require international cooperation to prevent regulatory arbitrage. It has also emphasized the need for international collaboration to assess risks and benefits and develop common standards and terminology. The Finance Ministry recently cautioned the public about the risks associated with cryptocurrency products and NFTs, stating that investors may have no regulatory recourse in the event of losses from such transactions. Authorities have also stepped up scrutiny of entities providing services linked to virtual digital assets, with the Financial Intelligence Unit-India issuing non-compliance notices to 15 Virtual Digital Asset Service Providers under the Prevention of Money Laundering Act, 2002.