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Money laundering law will be implemented in India on cryptocurrencies

Money laundering laws will apply to trading in cryptocurrencies in India. The Central Government has issued a notification regarding this on 7th March. It states that the exchange between virtual digital assets and common currencies, the exchange between one or more virtual digital assets and the transfer of digital assets will come under the Money Laundering Act.

It will also include the offering and sale of safe custody of virtual digital assets and related financial services. Regarding cryptocurrencies in the country Law has not been made. However, the Reserve Bank of India (RBI) has warned several times about cryptocurrencies. RBI says that they should be banned as they are like Ponzi scheme. Implementing rules related to money laundering for cryptocurrencies will give the right to monitor their transfers outside the country. India, which holds the presidency of the G-20, has pushed for a global agreement to deal with the growing conflict due to this segment.

Late last year RBI Governor Shaktikanta Das said that cryptocurrencies There is no value attached to it and it is a risk to macro economic and financial stability. Even before this, there has been a demand from RBI to ban crypto. About four years ago, the RBI had issued a circular about cryptocurrencies, prohibiting entities under its regulations from dealing in such instruments. However, this circular of RBI was rejected by the Supreme Court about two years back.

The regulatory situation regarding cryptocurrencies in the country is unclear. Inputs are also being taken from the World Bank and the International Monetary Fund (IMF) for the consultation paper being prepared by the government on cryptocurrencies. The Financial Stability Report (FSR) released last year said that with the financial system becoming more digitised, cyber risks are also increasing and need to be addressed. It was told that cryptocurrencies are a clear threat. Any valuation based solely on belief without any underlying asset is speculation.


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