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Web3

Policy

<p>In a significant turn of events, the Namibian government has officially signed a law to regulate Virtual Asset Service Providers (VASPs) operating in the country. The newly approved legislation, titled the Namibia Virtual Assets Act 2023, marks a notable departure from the country's previous stance on cryptocurrency exchanges, as it had initially imposed a ban in 2017.</p>

<h3>A landmark move to oversee crypto exchanges</h3>

<p>The Namibia Virtual Assets Act 2023 is a pioneering piece of legislation, serving as the country's first comprehensive framework for regulating cryptocurrency-related activities. Having received approval in Namibia's National Assembly on July 6, the bill was officially inserted into the Gazette of the Republic of Namibia on 21 July after being signed by President Hage Geingob on 14 July.</p>

<p>The primary objective of the law is to establish a regulatory authority responsible for overseeing and supervising crypto exchanges within the country. By implementing this framework, Namibia aims to ensure</p>

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<ul class="tab-link">
	<li class="editor-readmore"><a class="editor-rel-content" href="https://www.web3cafe.in/cryptocurrency/story/uk-regularises-crypto-stable-coins-bill-to-become-an-act-606954-2023-06-30">UK regularises crypto &amp; stable coins, bill receives Royal Assent to become an Act</a></li>
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<p>consumer protection, prevent market abuse, and tackle the risks of money laundering and terrorist financing associated with virtual assets.</p>

<h3>Compliance and penalties</h3>

<p>According to the Namibia Virtual Assets Act 2023, those providers who fail to comply with the regulatory requirements may face substantial penalties. Reports indicate that non-compliant VASPs could be subject to fines of up to 10 million Namibian dollars (nearly $671,000) and could even face up to 10 years in prison.</p>

<p>However, it is important to note that the Bank of Namibia remains firm in its stance that cryptocurrencies will not be recognised as legal tender within the country. Despite embracing cryptocurrency regulation, Namibia does not intend to grant legal tender status to digital currencies.</p>

<h3>African crypto landscape</h3>

<p>Namibia's recent move follows a trend of evolving cryptocurrency regulations across the African continent. While some nations have embraced the potential of cryptocurrencies and adopted regulatory frameworks, others have imposed bans on digital assets. South Africa, for example, has recently announced that all cryptocurrency exchanges operating within its borders must obtain licenses by the end of 2023 to continue their operations.</p>

<p>With Botswana, Kenya, Mauritius, and Seychelles already having passed cryptocurrency laws, the African crypto landscape continues to evolve. Notably, the Central African Republic briefly granted Bitcoin legal tender status in April 2022, but the legislation was later repealed within a year. Other African nations, such as Cameroon, Ethiopia, Lesotho, Liberia, Republic of the Congo, Sierra Leone, Tanzania, and Zimbabwe, have opted to enforce bans on cryptocurrencies, as reported by the International Monetary Fund.</p>

<p>As the crypto industry matures globally, African countries are navigating the complexities of digital assets, seeking to strike a balance between embracing innovation and protecting financial stability.</p>


The Namibian government has passed a law to regulate Virtual Asset Service Providers (VASPs) operating in the country.

The Namibian government has passed the Namibia Virtual Assets Act 2023 to regulate the VDAs 

Its primary aim is to establish a regulatory authority responsible for overseeing and supervising crypto exchanges within the country

Namibia passes crypto regulation bill

web3

policy

Namibia embraces crypto: New law signals regulation for virtual asset service providers

Namibia gives green signal to crypto assets bill 

<p>On Tuesday, The Goods and Services Tax (GST) Council, held a meeting, where it was announced to impose a 28 percent tax on online gaming, casinos, and horse racing.</p>

<p>Union Finance Minister, Nirmala Sitharaman, as stated that the government is not targeting any specific industry and does not want to end any industry related to online gaming, casinos, and horse racing but there was discussion on the moral question of whether these should be taxed at the same rate as essential items.</p>

<p>In fact, the said GST rate would be levied at full face value and the effective date for the new GST rate rollout on online gaming will be done after the modifications to the law. Sitharaman has clarified that the tax on online gaming companies would be levied without making any differentiation based on whether these games are based on skill or chance.</p>

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<ul class="tab-link">
	<li class="editor-readmore"><a class="editor-rel-content" href="https://www.web3cafe.in/web3/gaming/story/top-five-play-to-earn-mobile-games-to-earn-crypto-in-2023-560083-2023-05-18">Top five play-to-earn mobile games to earn crypto in 2023</a></li>
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<h3>Reactions by the online gaming community</h3>

<p>This declaration came as a shocker for the country’s gaming industry. Businesses involved in this space have stated that the decision will hit the industry as it will affect gaming volumes and the viability of gaming companies.</p>

<blockquote class="at-quotes">
<p>GST will be detrimental for the entire gaming industry. Most gaming platforms operate within 7-15% revenue margin. A 28% margin will erode the complete margin. Web3 has already been under a lot of pressure due to government policies against crypto. This is just a double whammy for the web3 gaming industry.</p>

<div class="author">Dinesh Goel, Founder, One World Nation</div>
</blockquote>

<p>Even the Chief Executive of AIGF (All India Gaming Federation), Roland Landers, is of the same opinion, mentioning the announcement to be “unconstitutional, irrational, and egregious.” He opines that the GST Council’s decision will wipe out the entire Indian gaming industry and cause several job losses and eventually benefiting the anti-national illicit platforms.</p>

<blockquote class="at-quotes">
<p>All Indian Web3 gaming companies who are registered under Indian Territorial jurisdiction will be severely impacted by this taxation. This is regressive approach and will open up doors to operate Indian market from outside India. This is not desirable state for any companies who want to contribute to Indian economy and grow within India. This is out and out regressive step and that does not mean penetration of online gaming will be stopped within Indian youth as Web3 has no territorial boundaries.</p>

<div class="author">Jayjit Biswas, Founder, Elite Web3 Forum</div>
</blockquote>

<p>Co-founder and Co-CEO, of Games24x7, Bhavin Pandya, has stated that the decision would make the gaming industry unviable, thereby, effectively steering away consumers towards offshore and illegal platforms that pay no taxes, resulting in loss of taxes and outflow of foreign exchange.</p>

<blockquote class="at-quotes">
<p>The vision of creating a progressive digital gaming ecosystem seems uncertain in light of this decision by the GST Council. The proposed tax regime will impede the growth of India's gaming industry, which has experienced significant expansion in recent years. The Indian online gaming industry will be at a competitive disadvantage considering the fact that globally, the tax rate for online gaming is around 18%. The industry will find it difficult to attract investments, and eventually the professionals in the industry will resort to foreign platforms.</p>

<div class="author">Roma Priya, Founder, Burgeon Law</div>
</blockquote>

<p>&nbsp;</p>

<p>Akshay Khandelwal, Founder,&nbsp;Bowled.io, has stated, "This is a significant event for the online gaming industry; we can’t say it is entirely unexpected. If you consider the macro outlook, India is the youngest nation in the world (600M+ population below 25 YO) with more than 300M active gamers.</p>

<p>The gaming industry in India was expected to grow at 22.65% CAGR from 2022-2027. For India, online gaming is perhaps the only sector that has produced multiple profitable unicorns. The decision to further regulate the industry puts margin pressures on the incumbents and makes the traditional player economics difficult to sustain, forcing them to reconsider their business models and innovate." He added, "However, this decision presents an opportunity for the next generation of companies like ourselves to introduce newer business models. While, in the short term, it does impact everyone in the industry, including ourselves, we almost see it as the beginning of a new era for the Indian gaming industry."</p>

<p>In the words of Jay Sayta, Technology &amp; Gaming Lawyer, “Since it has been decided by the GST Council that amendments have to be made to Entry 6 of Schedule III of the CGST Act to exclude online skill-based gaming from the ambit of actionable claims and correspondingly all 28 states will have to amend their state GST laws to reflect this position, it will take at least 5-6 months to bring into force this changed rate and manner of valuation of taxation for online skill gaming industry. Meanwhile, the industry will also likely be seeking interim relief from courts as and when the law is brought into force.”</p>


The Indian government has declared levying 28% GST on online gaming, which would be taxable at full face value.

The GST Council will now levy 28% tax on online gaming 

The declaration came as a shocker for the country’s online gaming industry

Govt announces imposing 28% GST on online gaming

Govt announces 28% GST on online gaming, how has Web3 community reacted to this decision?

Govt announces 28% GST on online gaming

Crypto Shankar

<p>As per the latest reports, UK's crypto bill has sought royal assent, meaning that the bill has been approved by King Charles, thereby making the Financial Services and Markets Bill (FSMB) an Act. Hence, it is anticipated that now nearly 340-page document will be made UK law in the coming future.</p>

<p>The above-mentioned bill was approved by the House of Lords on 19 June, and on Thursday received royal consent. The said move will now bring crypto and stablecoins into the scope of regulation.</p>

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	<li class="editor-readmore"><a class="editor-rel-content" href="https://www.web3cafe.in/cryptocurrency/story/us-house-subcommittee-to-vote-on-a-cryptocurrency-bill-for-regulation-in-upcoming-weeks-579482-2023-06-14">US House subcommittee to vote on a cryptocurrency bill for regulation in upcoming weeks</a></li>
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<h3>Landmark moment for the crypto industry</h3>

<p>As the bill transits itself into an Act, it is a watershed moment for cryptocurrency regulation in the country, providing much-needed legal clarity. The UK government will now need to develop detailed regulations to make the bill law, with the FCA expected to play a pivotal role.</p>

<p>The new Act will allow the Treasury, the Bank of England, the Financial Conduct Authority (FCA) as well as the Payments Systems Regulator to introduce and enforce official regulations for crypto businesses.</p>

<p>In the words of Andrew Griffith, UK’s Financial Services Minister, “The Act "gives us control of our financial services rulebook," following the U.K.'s exit from the EU, enabling regulation of crypto assets to support their safe adoption in the U.K.”</p>

<p>The UK Treasury in the press release stated, “It “enables the regulation of crypto assets to support their safe adoption in the UK” and called this move a “rocket boost” for the economy.</p>

<p>It must be noted that when the bill was debated in Parliament, amendments were added to supervise crypto promotions and to treat all cryptos as a regulated activity.</p>

<p>Interestingly, the move indicates the UK’s ambition to become a hub for crypto innovation, opine experts.</p>


After getting the approval of King Charles, the UK's Financial Services and Markets Bill will now be made into law.

The UK's crypto bill has sought Royal Assent

The move makes the Financial Services and Markets Bill an Act

UK regularises cryptocurrencies 

cryptocurrency

UK regularises crypto & stable coins, bill receives Royal Assent to become an Act

UK regularises crypto & stable coins

<p>The U.K.’s Financial Conduct Authority (FCA) has begun tightening its noose around cryptocurrencies. The financial regulator is set to put in place stringent rules for advertising on cryptocurrencies, as per the documents released on Thursday. It says that first-time British customers buying crypto assets will be given a 24-hour cooling-off period from 8 October.</p>

<p>Further, the UK’s financial watchdog mentioned that bonuses for introducing friends to a crypto firm’s products will also be banned. Also, those firms promoting such assets would need to carry a clear risk warning in their adverts and should also ensure that they are fair and not misleading.</p>

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	<li class="editor-readmore"><a class="editor-rel-content" href="https://www.web3cafe.in/emerging-tech/cbdc/story/russia-to-drop-setting-up-of-national-crypto-exchange-instead-will-focus-on-regulations-568977-2023-06-01">Russia to drop setting up of national crypto exchange, instead will focus on regulations</a></li>
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<p>&nbsp;</p>

<h3>Crypto remains largely unregulated and high risk: FCA</h3>

<p>FCA’s policy statement on financial promotion rules for crypto assets mentions, "Even when the financial promotions regime comes into force, crypto assets will remain high risk and largely unregulated.” It further&nbsp;stated, “Consumers should only invest in crypto assets if they understand the risks involved and are prepared to lose all their money. Consumers should not expect protection from the Financial Service Compensation Scheme (FSCS) or Financial Ombudsman Service if something goes wrong."</p>

<p>In the words of Sheldon Mills, executive director at the FCA's consumers and competition division, "It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision."</p>

<p>FCA said that it wants consumers to receive timely, high-quality information which enables them to make informed and effective investment decisions related to cryptocurrencies and not be misled or pressured to invest in crypto assets.</p>

<p>It must be noted that the said new rules on marketing have been put forward because crypto ownership in the country has almost doubled from 2021 to 2022. Moreover, the financial watchdog aims to reduce and prevent any serious wrongdoings in this space.</p>


FCA, the UK’s financial watchdog, has unveiled stringent rules for crypto advertisements, stating consumers still need to be aware as crypto remains largely unregulated.

The UK's financial regulator is set to put in place stringent rules for advertising on cryptocurrencies

Bonuses for introducing friends to a crypto firm’s products will also be banned

The UK's FCA to tighten its stance of crypto marketing

UK’s lawmakers to tighten its stance on crypto promotion, ads need to carry risk warnings

UK lawmakers to tighten stance on crypto promotion

<p>The Reserve Bank of Zimbabwe (RBZ) on 23 April will soon launch a gold-backed digital currency, several reports have revealed. In fact, the move is a part of the government initiative to stabilise the local unit from prolonged depreciation against the US dollar.</p>

<h3>Zimbabwe’s struggle with inflation</h3>

<p>Here, it must be mentioned that the country has been struggling with currency volatility and inflation for nearly a decade. It adopted the US dollar as its currency after an episode of hyperinflation in 2009. And, the country reintroduced the Zimbabwean dollar in 2019 in a bid to revive its struggling economy. Interestingly, the US dollar was again reintroduced last year in an effort to tame the country's surging prices.</p>

<p>Last year, Zimbabwe’s annual inflation rarely fell below 90 percent. Moreover, its dollar has fallen steeply against other major currencies as well.</p>

<p>The said initiative will allow the holders of small amounts of Zimbabwean dollars to exchange their money for digital gold, thus, helping them store value and hedge against volatile exchange rates. It must be noted that the gold will remain in the custody of the issuing authority.</p>

<p>Dr. John Mangudya, the Governor of the Reserve Bank of Zimbabwe, has also mentioned that the central bank is planning to issue more physical gold coins. The country is using its gold reserves to draw Zimbabwe dollars out of circulation in a bid to control escalating prices. For this, the bank will issue the yellow metal in both physical and tokenised form.</p>


Zimbabwe's central bank is all set to start issuing gold-backed digital tokens that will be used as legal tender in the country.

Zimbabwe has announced launching gold-backed cryptocurrency

The move a part of initiative to stabalise local currency from continued depreciation against the US dollar

The country has been fighting inflation for over a decade

Zimbabwe’s central bank to launch gold-backed crypto: Report

Zimbabwe to launch gold-backed crypto: Report

<p>In a ruling made on Monday, a United States federal appeals court has ruled that Apple violated state competition laws by prohibiting app developers from using alternative in-app payment methods other than its own, which includes a 30 percent fee on most transactions.</p>

<p>The said ruling was made by the United States Court of Appeals for the Ninth Circuit in the case of Apple vs Epic Game, the creator of the Fortnite video game. The lawsuit was filed by Fortnite creator against the tech giant in 2020, over the latter’s alleged monopoly in the mobile games market. The court said that Apple does not have a monopoly over gaming apps and that its anti-steering provision harmed Epic.</p>

<p>Epic Games founder and chief executive, Tim Sweeney, posted a tweet in this regard.</p>

<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">Fortunately, the court's positive decision rejecting Apple's anti-steering provisions frees iOS developers to send consumers to the web to do business with them directly there. We're working on next steps.</p>
— Tim Sweeney (@TimSweeneyEpic) <a href="https://twitter.com/TimSweeneyEpic/status/1650592346176626709?ref_src=twsrc%5Etfw">April 24, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

<p class="MsoNormal">&nbsp;</p>

<h3>Companies oppose Apple’s anti-steering norms</h3>

<p>Here, it must be mentioned that Apple's anti-steering provision is a policy that states that iOS developers cannot communicate out-of-app payment methods through certain mechanisms such as in-app links. As a result, the policy escalated the costs of Epic’s subsidiaries’ apps that are still on Apple’s App Store and prevented other app users from becoming would-be Epic Games consumers. By doing so, Apple was charging a hefty 30 percent&nbsp;commission from the developers, and no one had any option. The court wrote that Apple has violated the Unfair Competition Law.</p>

<p>It must be noted that last year, in December, Coinbase entered into a feud with the tech giant as the latter had forced it to remove NFT transfers from its iOS wallet. In fact, the iPhone maker allegedly wanted to take a 30 percent cut of the gas fee through in-app purchases.</p>

<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">You might have noticed you can't send NFTs on Coinbase Wallet iOS anymore. This is because Apple blocked our last app release until we disabled the feature. 🧵</p>
— Coinbase Wallet (@CoinbaseWallet) <a href="https://twitter.com/CoinbaseWallet/status/1598354819735031809?ref_src=twsrc%5Etfw">December 1, 2022</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

<p>Also, Uniswap Labs faced issues with Apple’s App Store regarding its mobile wallet. Interestingly, inspite of having its first build approved in October, Uniswap’s final build of its mobile wallet was disapproved by the tech behemoth just a few days before its planned December 2022 launch. However, it finally got Apple's approval to launch its wallet in the iOS App Store.</p>

<p>Further, Meta, the parent company of both Facebook and Instagram, was also hit by Apple’s updated App Store policy wherein it had asked developers for a 30 percent cut. Even Spotify, the music streaming app, has spoken against Apple’s App Store rules.</p>

US court has ruled that Apple violated the Unfair Competition Law and its 30% tax cut on in-app purchases has been deemed illegal by the court.

A US federal appeals court has ruled that Apple had violated competition laws

The tech giant had barred app developers from using other payment methods besides it own and levied a 30% fee 

A lawsuit was filed by Epic Games alleging Apple's monopoly in the mobile gaming industry

US court ruled out Apple's 30% tax cut

Apple’s 30% tax on in-app purchases judged unlawful by court

Apple’s 30% tax cut judged unlawful by court

Blockchain

<p>On Wednesday, Nigeria, an African country, approved the National Policy on Blockchain, thus paving the way for the formal use of blockchain technology in the country.</p>

<p>The policy which was drafted by the Federal Ministry of Communications &amp; Digital Economy, would be a part of the country's effort to transition to a digital economy. The Ministry in a tweet stated, “The vision of the Policy is to create a Blockchain-powered economy that supports secure transactions, data sharing, and value exchange between people, businesses, and Government, thereby enhancing innovation, trust, growth, and prosperity for all.”</p>

<h3>New policy to help build the country’s digital economy</h3>

<p>In other words, Nigeria’s new policy aims to establish a blockchain-based economy, and the implementation of the policy helps to maintain a favourable impact on both the public and private sectors in Nigeria.</p>

<p>It must be noted that NITDA, i.e., the National Information Technology Development Agency will be responsible for coordinating the policy initiatives. Further, a multisectoral steering committee has been formed to oversee policy implementation.</p>

<p>However, the approved policy is not yet public and the above-mentioned tweet did not mention cryptocurrencies. Here, it is pointed out that the Central Bank of Nigeria (CBN), in 2021, prohibited financial institutions from providing their services for crypto-related transactions.</p>

<p>Talking about the ban, the regulator cited high risks associated with trading cryptocurrencies such as Bitcoin. CBN also promised to impose strict penalties for any lender or financial institution failing to comply with the directive.</p>

<p>Tolu Ogunlesi, the special assistant to the President on digital and new media, has mentioned that relevant agencies would be working to develop appropriate regulatory frameworks. He stated that the government established a steering committee led by the National Information and Technology Development Agency to oversee policy implementation. Ogunlesi promised that the approved policy would be provided soon.</p>


The Nigerian government has given a nod to a national blockchain policy, which is expected to have a favourable impact on the country's private and public sectors.

Nigeria has approved a a national blockchain policy

The move would be a part of the country's effort to transition to a digital economy

The policy does not mention about cryptocurrencies

Nigeria approves a national blockchain policy

blockchain

Nigeria approves national blockchain policy, for transitioning the country to a digital economy

Nigeria approves national blockchain policy

<p>On Tuesday, at the City Week conference in London, UK’s Financial Conduct Authority (FCA) Executive Director, Sarah Pritchard, highlighted the need for cooperation on crypto regulations.</p>

<p>She stated that the financial regulator intends to work together with crypto companies so as to frame a regulatory framework for the industry. "We want industry's input to make sure we get the future regulatory regime for crypto assets right," mentions Pritchard. She further added, "Let's work together, to shape our rules and regulations to benefit markets, consumers, and firms as crypto goes from niche to mainstream."</p>

<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">In her speech at <a href="https://twitter.com/hashtag/CityWeek2023?src=hash&amp;ref_src=twsrc%5Etfw">#CityWeek2023</a>, Sarah Pritchard spoke about the regulation of <a href="https://twitter.com/hashtag/cryptocurrency?src=hash&amp;ref_src=twsrc%5Etfw">#cryptocurrency</a> and how effective early engagement can support regulation that benefits all. <a href="https://t.co/w6Zv6K5FP1">https://t.co/w6Zv6K5FP1</a></p>
— Financial Conduct Authority (@TheFCA) <a href="https://twitter.com/TheFCA/status/1650892921120387075?ref_src=twsrc%5Etfw">April 25, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

<p>Here, it must be noted that apart from the Treasury, FCA is one of the key crypto regulators in the UK and registers cryptocurrency firms to conduct operations across the country. The agency is also planning to introduce a promotions regime for digital assets and is working closely with the government on its proposals to regulate stablecoins.</p>

<p>Interestingly, FCA was earlier known for its censorious stance on the crypto sector, but now, the agency has started listening to the crypto industry at its engagement meetings with the industry, opine the industry advocates.</p>

<h3>UK’s contradictory approach to that of the US</h3>

<p>The above-mentioned remarks of the FCA'S Executive Director reflect the country's positive stance toward embracing this new-age technology. However, the same does not hold true for the United States. Regulatory uncertainty continues to hover across the country.</p>

<p>In fact, the US crypto sector claims that regulatory authorities are leaving no stone unturned to thwart the crypto sector with its enforcement actions instead of deliberating on meaningful regulations in collaboration with industry leaders.</p>


FCA, the financial watchdog of the United Kingdom is keen on working with crypto firms to share regulations in this space. 

UK's financial regulator intends to work with crypto firms

It wants to develop crypto regulations in collaboration with industry leaders

It is of the opinion that crypto assets and blockchain offer efficient financial services

UK's FCA keen on working with crypto firms to frame regulations

UK’s FCA reveals its intentions to work with crypto industry

UK’s FCA reveals its plans to work with crypto industry

<p class="text-align-justify">Some of the most important issues related to financial stability and regulation were discussed during India's membership in the first G20 Finance Ministers and Central Bank Governors (FMCBG) conference, held February 24–25, 2023.<br />
<br />
Given the international reach of crypto assets, India's Finance Minister, Nirmala Sitharaman, has previously supported developing crypto regulations in collaboration with other governments.<br />
&nbsp;<br />
G20 members discussed the potential of technological innovations during the FMCBG meeting highlighting the importance of balancing associated risks. The major aspects that were discussed at the conference were financial stability and regulatory concerns, policy approaches for advancing financial inclusion, and G20 productivity gains.<br />
<br />
<strong>Finance Minister and RBI Governor Statements</strong><br />
&nbsp;</p>

<div class="embedcode">
<blockquote class="twitter-tweet">
<p class="text-align-justify" dir="ltr" lang="en">Union Finance Minister Smt. <a href="https://twitter.com/nsitharaman?ref_src=twsrc%5Etfw">@nsitharaman</a> &amp; Shri <a href="https://twitter.com/DasShaktikanta?ref_src=twsrc%5Etfw">@DasShaktikanta</a>, Governor <a href="https://twitter.com/RBI?ref_src=twsrc%5Etfw">@RBI</a> steered <a href="https://twitter.com/hashtag/G20?src=hash&amp;ref_src=twsrc%5Etfw">#G20</a> discussions in 2nd session on key financial sector and <a href="https://twitter.com/hashtag/FinancialInclusion?src=hash&amp;ref_src=twsrc%5Etfw">#FinancialInclusion</a> issues during the 1st <a href="https://twitter.com/hashtag/G20?src=hash&amp;ref_src=twsrc%5Etfw">#G20</a> <a href="https://twitter.com/hashtag/FMCBG?src=hash&amp;ref_src=twsrc%5Etfw">#FMCBG</a> meeting under <a href="https://twitter.com/hashtag/G20India?src=hash&amp;ref_src=twsrc%5Etfw">#G20India</a> Presidency, in Bengaluru, today. (1/6) <a href="https://t.co/bRtFmrBL9x">pic.twitter.com/bRtFmrBL9x</a></p>
</blockquote>

<blockquote class="twitter-tweet text-align-justify">— Ministry of Finance (@FinMinIndia) <a href="https://twitter.com/FinMinIndia/status/1629136338384744448?ref_src=twsrc%5Etfw">February 24, 2023</a></blockquote>

<p class="text-align-justify"><script async="" charset="utf-8" src="https://platform.twitter.com/widgets.js"></script></p>
</div>

<p class="text-align-justify">As per the tweet by the ministry of finance, “During the first G20 FMCBG meeting held today in Bengaluru, Union Finance Minister Nirmala Sitharaman and Shri Shaktikanta, the Governor of the RBI, led discussions on important financial sector and financial inclusion issues in the second session.<br />
<br />
Sitharaman acknowledged support for measures involving crypto assets in her conclusion. A concerted effort "for building and understanding the macro-financial implications," which may be used to change crypto laws internationally, was specifically requested by the finance minister.<br />
<br />
According to the reports by Binance, “she also expressed her gratitude to the IMF for publishing a thorough research on the macro-financial effects of crypto assets”.<br />
<br />
Sitharaman concluded by highlighting the importance of cooperation among the G20 countries "to support responsible technological advancements and maintain the stability of the financial system."<br />
<br />
The IMF-FSB (The Financial Stability Board) synthesis paper on crypto assets, scheduled for release in September 2023 , was discussed at the end of the two-day FMCBG conference.<br />
<br />
Shaktikanta Das has highlighted the dangers presented by cryptocurrencies, including the need for a look at these goods. These dangers include those to monetary systems, cyber security, and overall financial stability.<br />
&nbsp;</p>


In order to create macro-financial aspects that may be used to create global crypto changes, India's finance minister called for a coordinated effort.

India's Finance Minister, Nirmala Sitharaman, has previously supported developing crypto regulations in collaboration with other governments

The major aspects that were discussed were financial stability and regulatory concerns, and G20 productivity gains

The RBI governor has highlighted the dangers presented by crypto

Coordination of global crypto regulations: A G20 goal for financial stability 

G20: A call for the coordination of global crypto regulations

<p class="text-align-justify">Web3.0, also known as Web3, is the third generation of the internet, built on top of blockchain advancements and Scientific Web technology. The Metaverse, Blockchain, and NFTs are just a few of the products based on these technologies.</p>

<p class="text-align-justify"><br />
"Web3 technologies are set to revolutionise the internet as we know it, producing a more democratic and open platform for users and businesses," claims a recently released white paper titled, Entrepreneur Web-3 Conference. When venture capitalists begin to invest in Web3 companies, we should expect to see even more growth and innovation in this space."</p>

<p class="text-align-justify"><br />
According to research, the Indian Web3 market will likely grow at a compound annual growth rate (CAGR) of 57% from $0.0049 billion in 2022 to $1.1 billion in 2032.</p>

<p class="text-align-justify"><br />
The current size of the Indian market for the metaverse is $2.4 billion, and it is predicted that it will rise at a CAGR of 39.2% by 2030 when it will reach a value of $34 billion. In terms of blockchain, according to a white paper published at the 'Entrepreneur Web3 Conference' in Bengaluru, the Indian market for blockchain will grow at a staggering 47.3% CAGR, reaching $4.3 billion by 2025.</p>

<p class="text-align-justify"><br />
<strong>NFTs on the rise&nbsp;</strong></p>

<p class="text-align-justify"><br />
In terms of NFTs, or non-fungible tokens, the Indian market is currently valued at $2.46 billion, with a CAGR of 22.82% expected to reach $8.5 billion by 2027. The credit goes to the active participation of small and large businesses in the wide adoption of these Web3 technologies, which has helped India grow and enhance in terms of Web3 innovation and development.</p>

<p class="text-align-justify"><br />
The non-fungible token (NFT) market has also grown in popularity, with the global NFT market expected to grow from $2.46 billion in 2022 to $8.6 billion by 2027.</p>

<p class="text-align-justify"><br />
The size of the global Web3 market is predicted to rise from $3.3 billion in 2021 to $82.72 billion by 2030, the report said.&nbsp;</p>

<p class="text-align-justify"><br />
Let us wait and see how Web3 grows and develops in the coming years.&nbsp;</p>

<p><br />
&nbsp;</p>


The Indian Web3 market is expected to increase from $0.0049 billion in 2022 to $1.1 billion in 2032.

Web3 technologies revolutionise the internet, creating a more democratic and open platform

The global market for NFTs is expected to grow from $2.46 billion in 2022 to $8.6 billion by 2027

The size of the global Web3 market is predicted to rise from $3.3 billion in 2021 to $82.72 billion by 2030

Web-3 industry to reach $1.1B by 2032

Web3 all set to rule in India, predicted to reach $1.1B by 2032: Report

Web3 space all set to rule in India: Report

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">The Web3 project team of Japan's ruling Liberal Democratic Party has released a white paper citing recommendations for pushing the country’s crypto industry.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">The said move is a crucial part of the national strategy under Japan’s Prime Minister, Fumio Kishida. This project which is titled ‘ Cool Japan’ aims at promoting <span style="background:white">technology,&nbsp;<o:p></o:p></span></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin;background:white">As per reports, Japan's Web3 project team plans to formulate </span><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">regulations for NFTs (non-fungible tokens), DAOs (decentralised autonomous organizations), etc.<span style="mso-spacerun:yes">&nbsp; </span>Interestingly, while other national governments are looking to stiffen their control over this space resulting in many companies relocating to other countries owing to higher tax rates, Japan is working on creating a cryptocurrency-friendly ecosystem.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">In the words of Akihisa Shiozaki, secretary-general of the party's Web3 project team, “The cryptocurrency industry has been driven by early adopters, but it will shift to mass adoption from now on.” He further added that several major firms have started to enter the Japanese market. It must be noted that NTT Docomo, the Japanese mobile phone operator, has committed to invest up to $4 billion into Web3 infrastructure and large financial institutions are looking to issue stablecoins. <o:p></o:p></span></p>

<h3>What else the white paper suggests?</h3>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">Furthermore, as per the white paper, Japan must display leadership during the current year’s G7 summit, which focuses on crypto issues. Also, it recommends the country to focus on the potential benefits of Web3 and develop a prominent stance on technology-agnostic and ethical innovation.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">In addition, the white paper suggests additional modifications to tax regulations, enabling self-assessments as well as allowing investors to carry forward their losses for up to three years. It also proposes that crypto should be taxed when it is converted into fiat currency.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">The document also states that ministries and agencies should support the Japanese Institute of Certified Public Accountants in preparing regulations.<o:p></o:p></span></p>


Japan introduces a whitepaper on Web3, which outlines recommendations for the nation's Web3 space expansion.

Japan has published a white paper outlining recommendations for expanding the nation's Web3 space

Its Web3 project team intends to formulate regulations for NFTs, DAOs, etc.

It further recommends the country to focus on the potential benefits of Web3 

Japan pushes for friendlier crypto ecosystem

Japan unveils Web3 whitepaper, pushes for creating a crypto-friendly ecosystem

Japan pushes for creating a crypto-friendly ecosystem

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">The UK's Financial Conduct Authority has warned cryptocurrency businesses there that failure to comply with certain promotion regulations could result in sentences of up to two years in prison.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">The financial watchdog has&nbsp;stated&nbsp;that all crypto firms, both domestic and foreign, would have to adhere to certain requirements when marketing their crypto services to UK customers if the proposed "financial promotions regime" is approved by Parliament.&nbsp; As per the &nbsp;proposed regime, crypto-related enterprises will either have to acquire authorisation from the agency to market their services or have to take an exemption under the Financial Promotion Order. "Crypto asset businesses marketing to UK consumers, including firms based overseas, must get ready for this regime,” it says.&nbsp;&nbsp;<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">The FCA continued, “Firms must start preparing now for this regime. We will take robust action against firms breaching these requirements."<o:p></o:p></span></p>

<h3 class="MsoNormal" style="text-align: justify;"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">Violation of rules to result in severe penalties<o:p></o:p></span></h3>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">In addition to possible prison time, firms that violate the law could attract public warnings and having their websites shut down, among other enforcement measures.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">The FCA has stated that they will publish "our final rules for crypto asset promotions" after reviewing the "relevant legislation," which may be a hint that the financial promotions regime may be updated or modified.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">The agency states, “Subject to any changes in circumstances, we expect to take a consistent approach to crypto assets to that taken in our new rules, in place from 1 Feb 2023, for other high-risk investments.”<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">Further, the financial regulator is of the opinion that cryptocurrencies carry a high risk and reiterated that consumers should be prepared to lose all their money when buying cryptocurrencies.<o:p></o:p></span></p>


The UK's financial watchdog has announced that companies promoting cryptocurrencies to UK consumers will face severe penalties if they are found violating certain promotional requirements.



The UK financial watchdog has forewarned crypto companies that breaking certain rules could result in harsh punishments

Crypto companies can face up to 2 years in prison for violating the country's advertising standards 

Other penalties may include public warnings, site removal and other enforcement actions

UK crypto companies to face jail if found breaching law

UK crypto companies to face jail time if found breaching of market norms 

Breaching norms? UK crypto firms to face jail time 

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%">Last year, the Indian government imposed a 1% TDS on cryptocurrency transactions. As a result, billions of dollars were transferred from India's domestic cryptocurrency exchanges to overseas exchanges.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%">Like other sectors of the economy, the Indian crypto community had high expectations from the Union Budget 2023. To the surprise of many who adore cryptocurrencies, Finance Minister Nirmala Sitharaman made no announcements during her presentation of the Budget to Parliament about cryptocurrencies, virtual digital assets, blockchain, or even CBDCs.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%">This has caused disappointment across the Indian crypto community and has dampened the nation’s crypto sentiment. As per Jayjit Biswas, Elite Web3 forum’s founder, “Until and unless basic regulations from G20 are established, the status quo on the direct taxation front will be maintained. The same is applicable for indirect taxation as you need to correctly categorise the VDA for GST or VAT tariff, unlike direct taxation where you can put all into one category.”<o:p></o:p></span></p>

<h3 class="MsoNormal" style="text-align: justify;"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%">Failure to pay TDS may attract penalty <o:p></o:p></span></h3>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%">Also, under the new tax laws, any attempt to evade TDS by using offshore platforms or non-compliant platforms can be punished under Section 271C of the Income Tax Act. Additionally, as per as per Clause 119 of Finance Bill, 2023 on Page 91, failure to pay TDS on crypto transactions can lead to a jail term of up to seven years. <o:p></o:p></span></p>

<h3 class="MsoNormal" style="text-align: justify;"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%">Why are Indian crypto users switching to overseas exchanges?<o:p></o:p></span></h3>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%">In fact, India has maintained its tough cryptocurrency tax regulations till 2023, i.e., last year, the government imposed harsh taxes on cryptocurrency transactions: a 30% profit tax and a 1% tax deducted at source (TDS) on all transactions. As a result, the country's crypto trading volumes plummeted, with nearly US$3.852 billion moving from Indian crypto exchanges to overseas platforms between February and October 2022, according to research by the Esya Centre, an Indian think tank for technology policy.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%">Interestingly, to avoid tax rules, Indian crypto investors have taken the global exchange route because, unlike Indian crypto exchanges, popular international crypto exchanges like Binance and KuCoin do not charge 1% TDS. However, they do a Know Your Customer (KYC) check before allowing trading on their platforms.<o:p></o:p></span></p>


With the announcement of 1% TDS on cryptocurrency transactions, the nation saw billions of dollars move from domestic to foreign crypto exchanges. Now this move can be punished.

Last year, the Indian government imposed a 1 percent TDS on crypto transactions

As a result, billions of dollars have been transferred from local crypto exchanges in India to foreign exchanges

Now, using offshore or non-compliant platforms to avoid TDS could result in a fine

penalty could be imposed if avoiding TDS on crypto transactions

Moving to a foreign crypto exchange? Evasion of TDS on crypto transactions may attract penalties

Avoiding TDS on crypto transactions may attract penalties

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">As nations around the world are considering implementing strict rules on the use of digital currencies, Italy’s government has imposed a 26 percent tax on cryptocurrency trading as a part of its 2023 budget law. In the budget, cryptocurrencies are referred to as virtual, electronically-based wealth that may be held and exchanged.<o:p></o:p></span></p>

<h3 class="MsoNormal" style="text-align: justify;"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">Incentives for declaring crypto income<o:p></o:p></span></h3>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">Crypto trading profits are subject to a tax of 26 percent<span style="mso-spacerun:yes">&nbsp; </span>if they exceed EUR 2,000 (approximately 1.7 lakh) per tax period. In order to encourage cryptocurrency investors to disclose their holdings, the nation has announced few incentives. As a result, the new bill has set a "substitute income tax" for investors at the rate of 14% of the assets' value on 1 January, 2023, rather than their original cost. <o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">Further, losses<span style="mso-spacerun:yes">&nbsp; </span>from crypto investments that are more than 2,000 euros in the tax period can be deducted from the profit and be carried over to the next tax period. <o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">Also, Italy has recognized the presence of a virtual digital asset sector in the current financial system.<o:p></o:p></span></p>

<h3 class="MsoNormal" style="text-align: justify;"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">How many people in Italy own cryptocurrencies?<o:p></o:p></span></h3>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin">Around 1.3 million people residing in Italy, i.e., nearly 2.3 percent of the population are crypto holders. According to reports, as of July 2022, the majority of crypto users in the nation were between the ages of 28 to 38 years. To encourage people to create businesses and make money, the nation continues to work in the crypto industry's favour.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
mso-bidi-font-size:11.0pt;line-height:115%;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin"><o:p>&nbsp;</o:p></span></p>


A 26% cryptocurrency tax has been approved by the Giorgia Meloni-led Italian government, which came into effect on 30 December last year. 

The Italian government has approved a 26 percent tax on crypto trading

The tax applies to crypto trading profits of more than 2,000 euros

Italy also listed some incentives for crypto investors to encourage them to declare their holdings

Italy declares 26% tax on crypto profits

Italy levies 26% tax on crypto earnings on income exceeding €2,000

Italy levies 26% tax on crypto earnings 

<p class="MsoNormal"><span style="font-size:12.0pt;mso-bidi-font-size:11.0pt;
line-height:115%">According to the most recent decision made by the central government regarding digital assets, businesses dealing in cryptocurrencies or virtual assets will now be covered by the PMLA, or Prevention of Money Laundering Act 2002.<o:p></o:p></span></p>

<p class="MsoNormal"><span style="font-size:12.0pt;mso-bidi-font-size:11.0pt;
line-height:115%">As per&nbsp;the gazette notification published on 7&nbsp;March by the Union Finance Ministry, virtual digital assets (VDAs) will now be regarded as "reporting entities" under the PMLA. Additionally, it is required of cryptocurrency exchanges and intermediaries that deal with VDAs to undertake KYC of their customers and clients. Also, cryptocurrency exchanges are obligated to notify the Financial Intelligence Unit of India (FIU-IND) of any questionable transactions.<o:p></o:p></span></p>

<p class="MsoNormal"><span style="font-size:12.0pt;mso-bidi-font-size:11.0pt;
line-height:115%">The Act will also apply to the management or storage of VDAs as well as the tools that provide control over VDAs.<o:p></o:p></span></p>

<p class="MsoNormal"><span style="font-size:12.0pt;mso-bidi-font-size:11.0pt;
line-height:115%">The above measure has been taken to curb misuse of digital assets and is a step towards regulation in this space. It is noted here that the Indian government is yet to finalize cryptocurrency legislation and regulations, although the RBI believes that cryptocurrencies are similar to <span style="mso-spacerun:yes">&nbsp;</span>Ponzi schemes. <o:p></o:p></span></p>

<p class="MsoNormal"><span style="font-size:12.0pt;mso-bidi-font-size:11.0pt;
line-height:115%"><span style="mso-spacerun:yes">&nbsp;</span>In fact,<span style="mso-spacerun:yes">&nbsp; </span>Finance Minister Nirmala Sitharaman announced last month that the country is discussing with other G20 member nations the need to create a standard working protocol for the regulation of crypto-assets.<o:p></o:p></span></p>

<h3 class="MsoNormal"><span style="font-size:12.0pt;mso-bidi-font-size:11.0pt;
line-height:115%">What do the experts have to say? <o:p></o:p></span></h3>

<p class="MsoNormal"><span style="font-size:12.0pt;mso-bidi-font-size:11.0pt;
line-height:115%">After the announcement, several industry experts praised the Center's move. “It mandates entities dealing in crypto to follow KYC, anti-money laundering regulations and due diligence as followed by banking and other financial entities which fall under the classification of reporting entities under PMLA,” says Sharat Chandra, co-founder of the India Blockchain Forum.<o:p></o:p></span></p>

<p class="MsoNormal"><span style="font-size:12.0pt;mso-bidi-font-size:11.0pt;
line-height:115%">Even CoinSwitch co-founder Ashish Singhal has applauded this decision.<o:p></o:p></span></p>

<p class="MsoNormal"><span style="font-size:12.0pt;mso-bidi-font-size:11.0pt;
line-height:115%">“Slowly but surely, we are moving towards a regulated crypto ecosystem! Entities such as CoinDCX are now required by law to conduct due diligence and enhanced due diligence under the PMLA,” mentions Sumit Gupta, CoinDCX’s CEO.<o:p></o:p></span></p>


The Indian government has declared that money laundering laws will now apply to transactions involving cryptocurrency and virtual assets.

The Union Finance Ministry has announced that crypto or VDAs will come under money laundering rules 

 A notice to this effect was published on March 7  

Crypto exchanges must report any suspicious transactions

Indian govt issues notification for crypto transactions 

Crypto Regulation: Indian Govt's notification to include virtual assets under money laundering act 

Indian Govt's notification on crypto transactions

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">According to the new PMLA clause, money laundering regulations will now be applied to the cryptocurrency industry. The Indian cryptoverse has benefited from the announcement.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">The Prevention of Money Laundering Act now covers cryptocurrency trading, virtual digital assets (VDAs), and associated financial services, as stated by&nbsp;the Union Finance Ministry.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">With the implementation of the PMLA, the Enforcement Directorate&nbsp;can now investigate any financial crime involving cryptocurrency assets.<o:p></o:p></span></p>

<h3 class="MsoNormal" style="text-align: justify;"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">What is stated in the Act?<o:p></o:p></span></h3>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">By way of a notification dated March 7, 2022, the Indian government brought cryptocurrency exchanges and VDA transfers under the purview of the PMLA Act. The country's cryptocurrency business will now be affected by money laundering regulations as the government tries to exert more control over digital assets there.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">According to the notification, VDA companies are now required to adhere to reporting standards and KYC regulations, much like banks and payment system operators, among other entities.<o:p></o:p></span></p>

<h3 class="MsoNormal" style="text-align: justify;"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">What is India's position on cryptocurrencies?<o:p></o:p></span></h3>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">It should be noted that despite the government enacting a tax on cryptos&nbsp;last year, no regulations&nbsp;were announced. In fact, T Rabi Sankar, the deputy governor of the RBI, called for a complete prohibition on cryptocurrencies and compared them to Ponzi schemes. Last year in April, I ndia declared that it would begin collecting a 30 percent income tax on cryptocurrency profit gains.&nbsp; Further,&nbsp;regulations relating to a 1% TDS on cryptocurrencies went into force in July 2022.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">The majority of Indian cryptocurrency investors have switched from domestic exchanges to foreign cryptocurrency exchanges as a result of the strict tax regulations imposed on them. As a result, trade activities across the Indian cryptocurrency exchanges were severely restricted owing to the stringent tax laws.&nbsp;<o:p></o:p></span></p>

<h3 class="MsoNormal" style="text-align: justify;"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">What was the&nbsp;response of&nbsp;crypto exchanges following this move?&nbsp;<o:p></o:p></span></h3>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin">The Indian crypto sector, however, is pleased with the most recent Center notification. According to experts, new regulations will stop cryptocurrency misuse, such as money laundering, among other things.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:
Calibri;mso-bidi-theme-font:minor-latin;letter-spacing:-.1pt">“At WazirX, we are voluntarily implementing the majority of the KYC/AML measures because they are best practices.<span style="mso-spacerun:yes">&nbsp; </span>With this announcement, compliance has become mandatory.<span style="mso-spacerun:yes">&nbsp; </span>Thus, from an exchange standpoint, not much has changed for us. The decision to include crypto exchanges in the PMLA is a good and long-overdue step. By imposing taxes in 2022 and now placing crypto exchanges under the purview of the PMLA, the government is slowly but surely taking baby steps towards crypto regulation,” said Mr. Rajagopal Menon, Vice President of WazirX.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span style="font-size:12.0pt;
line-height:115%;mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:
Calibri;mso-bidi-theme-font:minor-latin;letter-spacing:-.1pt">According to Ashish Singhal, CEO &amp; Co-Founder of CoinSwitch, “This notification will help establish greater transparency in the ecosystem and this is a welcome positive step in strengthening the India VDA sector. It’ll also help establish a common standard across all VDA platforms operating in India.”<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span lang="EN-IN" style="font-size:12.0pt;line-height:115%;mso-fareast-font-family:&quot;Times New Roman&quot;;
mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin;letter-spacing:
-.1pt;mso-ansi-language:EN-IN">Additionally, the most recent action by the Indian government hints&nbsp;that governments all around the world are striving to safeguard the interests of cryptocurrency investors and recognising the importance of having clear rules.<o:p></o:p></span></p>

<p class="MsoNormal" style="text-align:justify"><span lang="EN-IN" style="font-size:12.0pt;line-height:115%;mso-fareast-font-family:&quot;Times New Roman&quot;;
mso-bidi-font-family:Calibri;mso-bidi-theme-font:minor-latin;letter-spacing:
-.1pt;mso-ansi-language:EN-IN">As per Giottus Crypto Platform’s CEO, Vikram Subburaj, "</span><span style="font-size:12.0pt;line-height:115%;
mso-fareast-font-family:&quot;Times New Roman&quot;;mso-bidi-font-family:Calibri;
mso-bidi-theme-font:minor-latin;letter-spacing:-.1pt">“The PMLA will ensure that KYC is no more a best practice but a compliance requirement. From the customers' perspective, the more an exchange adheres to the KYC process, the safer it is to invest and engage with the exchange.”<o:p></o:p></span></p>


According to the new PMLA clause, money laundering regulations will now be applied to the cryptocurrency industry. The Indian cryptoverse has benefited from the announcement.

On March 7, the Indian government published a notification on cryptocurrency trade and VDAs

Now, the Indian crypto industry would be subject to money laundering regulations

The nation's cryptocurrency exchanges have praised this action

PMLA rule for cryptos

How have the Indian exchanges responded to the crypto PMLA rule?

 Indian exchanges respond to the latest crypto PMLA rule

<p>The arrival of new technologies and innovations has set a lot of&nbsp;challenges for lawmakers to formulate new policies&nbsp;and&nbsp;keep a check on all bad actors. In this section,&nbsp;we track all the latest updates on how policymakers and various stakeholders and making sure innovation and growth take&nbsp;place under the watchful eyes of the law.&nbsp;</p>


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