The action is viewed as a good step forward in the crypto business, since it provides clarification on multiple fronts.
In a move that establishes which organisation has power over suspicious or unlawful actions in the crypto business, India identified the country’s Computer Emergency Response Team (CERT) as the national agency for cyber security, including the crypto industry.
To ensure cyber security in the area of payments and financial markets for citizens while protecting their data, fundamental rights, and economic freedom in light of the growth of virtual assets, the move requires crypto businesses, such as virtual asset service providers, to keep know-your-customer (KYC) information and financial transaction records for five years.
While the statement is seen by the sector as a gentle step toward regulation before crypto-specific legislation is adopted, the government has made no such claim. The rule to tax crypto enterprises before crypto-specific legislation, unveiled in February, was a similar, but much tougher, step. “Just because it is taxed does not make it legitimate,” a top finance ministry official remarked at the time.
India’s crypto law is still on ice, with the government seeking global agreement and Indian Finance Minister Nirmala Sitharaman praising the promise of crypto and blockchain technology while still expressing worries about security. After the recently announced tax on cryptocurrency in India, Sitharaman acknowledges the importance of proper regulation in this area.
“Blockchain has so much promise, not only in the financial space, but in so many others,” says the author “Last week, she stated. “We have no intention of harming this (cryptocurrency or blockchain).” She did, however, add that “It may also be exploited for less desired purposes, such as money laundering or leading to terrorism.
This is the first time the government has said that the data must be kept for a minimum of five years. The Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Department of Telecom will all have standards for KYC processes and data (DoT).
To establish an open line of communication on these new laws, crypto firms must select a point of contact with CERT, a unit of the Ministry of Electronics and Information Technology.
Sitharaman called for “joint global action” to effectively regulate this dynamic technology at a public event on Friday.
“What are you doing about crypto if there is impatience outside the world?” I understand your frustration, but I’m afraid that’s going to be the case “she stated during a recent Stanford University fireside chat. “It will take time for all of us to be certain that, at the very least, with the facts we have, we are making an informed decision. It’s not something that can be hastened.”