India is to apply its money laundering regulations to trade in cryptocurrencies, its federal government said on Tuesday.
The exchange between virtual digital assets and fiat currencies, the exchange between one or more forms of virtual digital assets and the transfer of digital assets will all now be covered under the country’s money laundering laws, the notification said.
The safekeeping or administration of virtual digital assets, and the participation in financial services related to the offer and sale of virtual digital assets, will also be covered, the notification added.
India is yet to finalise legislation and regulations surrounding cryptocurrencies even as the country’s central bank has cautioned against their use multiple times.
The Reserve Bank of India has said that cryptocurrencies should be banned as they are akin to a Ponzi scheme.
Extending India’s money laundering rules to cryptocurrencies will give authorities greater powers to monitor the transfer of the assets beyond the country’s borders.
The Narendra Modi-led administration, as part of its leadership of the G20 forum, has been pushing for a wider global agreement on dealing with the risks brought on by cryptocurrencies.
- Reuters, with additional editing from Alfie Habershon