{"id":239921,"date":"2023-04-27T19:39:02","date_gmt":"2023-04-27T14:09:02","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=239921"},"modified":"2023-05-02T17:26:10","modified_gmt":"2023-05-02T11:56:10","slug":"virtual-digital-assets-indias-stand-and-the-way-ahead","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/virtual-digital-assets-indias-stand-and-the-way-ahead\/","title":{"rendered":"Virtual digital assets, India\u2019s stand and the way ahead"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cVirtual digital assets, India\u2019s stand and the way ahead\u201d <\/strong>published in \u201cThe Hindu\u201d <\/strong>on 27th April 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS2- Governance<\/p>\n

Relevance:<\/strong> Regulation of virtual digital assets<\/p>\n

News- <\/strong>In a recent notification, the government extended the anti-money laundering provisions to virtual digital assets businesses and service providers.<\/p>\n

What are some facts about the notification?<\/strong><\/h2>\n

Virtual digital assets platforms will now have to register as a reporting entity<\/strong> with the Financial Intelligence Unit-India. The unit is the national agency to strengthen India\u2019s efforts against money laundering and terror financing. <\/strong><\/p>\n

Reporting entity platforms such as CoinSwitch are now mandated to implement know your custome<\/strong>r, record and monitor all transactions<\/strong>, and report to the Financial Intelligence Unit-India when any suspicious activity is detected.<\/p>\n

Why is this a step in the right direction?<\/strong><\/h2>\n

Such rules are already applicable<\/strong> to banks, financial institutions and certain intermediaries in the securities and real estate markets. Extending them to virtual digital assets provides virtual digital assets platforms with a framework to monitor and take actions <\/strong>against malpractices.<\/p>\n

A standardisation of such norms<\/strong> will make the Indian virtual digital assets sector transparent. <\/strong>It will also build confidence and assurance <\/strong>in the ecosystem. It will give the government more oversight <\/strong>on virtual digital asset transactions.<\/p>\n

Such risk-mitigation measures<\/strong> are in line with global guidelines<\/strong> put forward by the International Monetary Fund and the Financial Action Task Force<\/a>.<\/p>\n

Such guidelines acknowledge the role Virtual Asset Service Providers (VASP)<\/strong> play in regulating and monitoring <\/strong>the virtual digital assets ecosystem. VASPs are the most efficient bridges and eyes for regulators<\/strong> to effectively implement Anti-Money Laundering provisions.<\/p>\n

This could also be the basis for India to reconsider its tax treatment of virtual digital assets. <\/strong>PMLA notification mitigates the most money laundering and terror financing risks. So, there is little reason for the tax rates to be very high.<\/strong><\/p>\n

There is an opportunity to bring virtual digital assets taxes on a par with other asset classes<\/strong>. Reducing tax rates will also help stem the flight of capital, consumers, investments, and talent <\/strong>and tackle the grey economy for virtual digital assets.<\/strong><\/p>\n

This is also significant due to India\u2019s presidency of the G-20. The finance track of the G-20 is discussing the establishment of a global regulatory framework for virtual digital assets.<\/strong> India\u2019s leadership and experience is key here.<\/p>\n

There is also an opportunity to consider the steps taken by other G-20 nations<\/strong>. In Asia, Japan and South Korea have established a framework to license VASPs.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cVirtual digital assets, India\u2019s stand and the way ahead\u201d published in \u201cThe Hindu\u201d on 27th April 2023. Syllabus: GS2- Governance Relevance: Regulation of virtual digital assets News- In a recent notification, the government extended the anti-money laundering provisions to virtual digital assets businesses and service providers. What… Continue reading Virtual digital assets, India\u2019s stand and the way ahead<\/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":[212,10498,11550],"class_list":["post-239921","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-the-hindu","tag-virtual-digital-assets","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/239921","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=239921"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/239921\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=239921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=239921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=239921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}