{"id":219642,"date":"2022-12-23T19:40:38","date_gmt":"2022-12-23T14:10:38","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=219642"},"modified":"2022-12-23T19:40:38","modified_gmt":"2022-12-23T14:10:38","slug":"taking-the-lead-on-regulation-of-digital-assets","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/taking-the-lead-on-regulation-of-digital-assets\/","title":{"rendered":"Taking the lead on regulation of digital assets"},"content":{"rendered":"\n

Source<\/strong>: The post is based on an article\u00a0\u201cTaking the lead on regulation of digital assets\u201d <\/strong>published in The Indian Express<\/strong>\u00a0on\u00a023rd<\/sup> December 2022<\/strong>.<\/p>\n

Syllabus: GS 3 \u2013 Security<\/strong><\/p>\n

Relevance: <\/strong>measures to curb digital financial crimes<\/p>\n

News: <\/strong>The G20\u2019s Finance Track discussions came up with the regulation of Virtual Digital Assets (VDAs)<\/strong> to curb financial crimes such as money laundering and terror financing as a priority.<\/p>\n

What are the concerns linked to VDAs?<\/strong><\/h5>\n

VDAs are often misused for financial crimes.\u00a0There is \u2013 a)<\/strong> lack of proper regulatory measures, b)<\/strong> lack of reporting and transparency norms, c)<\/strong> absence of international consensus on regulatory design.<\/p>\n

Therefore, India has a critical role to play in shaping the global regulatory environment as it is one of the highest-ranked countries in terms of VDA adoption<\/strong> and also heading the presidency of G20.<\/p>\n

What measures can be taken by India?<\/strong><\/h5>\n

India can allow anti-money laundering (AML)<\/strong> authorities to have control over VDA transactions, have power to impose controls upon them and prosecute in the event of any misuse.<\/p>\n

These principles are included in the Financial Action Task Force Guidelines on Virtual Asset Transactions (FATF Guidelines).<\/strong> These guidelines have been adopted by various jurisdictions, including the EU, Japan and Singapore.<\/p>\n

What are Financial Action Task Force Guidelines on Virtual Asset Transactions?<\/strong><\/h5>\n

It prescribes minimum AML\/CFT standards<\/strong> that countries should use to prevent the misuse of VDA transactions<\/strong>. The Guidelines are applicable to VDA service providers of member states like India.\u00a0<\/strong><\/p>\n

The key features of guidelines are<\/strong> – a)<\/strong>\u00a0license\/registration requirements and extensive reporting and record-keeping obligations for VDA service providers, b)<\/strong> verifying the customer and beneficiary\u2019s identities for all transactions exceeding $1,000, c)<\/strong> it requires VDA service providers to perform enhanced obligations such as tracking the customer\u2019s IP address to ensure there are no links to illicit activities when a transaction is with a higher-risk country.<\/p>\n

This AML\/CFT framework in India exists under the Prevention of Money Laundering Act, 2002 (PMLA).<\/strong> It also includes reporting obligations for overseas transactions that fall under the ambit of suspicious transactions.<\/p>\n

However, PMLA does not apply to the VDA industry.<\/p>\n

What is the way ahead?<\/strong><\/h5>\n

Even though PMLA does not apply do VDAs, the government has the power<\/strong> to make the VDA industry come under the PMLA. This would make VDAs to report offshore transactions and be subject to regulatory framework.<\/p>\n

Therefore, the current discussion of G20 on VDAs<\/strong> and India coming up with the Digital Data Protection Bill and the Digital India Act<\/strong> will ensure Indians and digital businesses operate under the rights and responsibility framework<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on an article\u00a0\u201cTaking the lead on regulation of digital assets\u201d published in The Indian Express\u00a0on\u00a023rd December 2022. Syllabus: GS 3 \u2013 Security Relevance: measures to curb digital financial crimes News: The G20\u2019s Finance Track discussions came up with the regulation of Virtual Digital Assets (VDAs) to curb financial crimes such… Continue reading Taking the lead on regulation of digital assets<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10500],"class_list":["post-219642","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704814430},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/219642","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=219642"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/219642\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=219642"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=219642"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=219642"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}