The cryptocurrency market in India is likely to see a major impact due to the Government’s move to include virtual assets under the Prevention of Money Laundering Act (PMLA). The Indian government issued a notice under the PMLA to include virtual assets such as Cryptocurrencies. This decision comes as the government seeks to regulate the use of cryptocurrencies in the country, which has seen a surge since their adoption in recent years.
The notice was issued by the Ministry of Finance on monday stating “virtual assets” would now be considered as “property” under the PMLA. “PMLA” was passed in the year 2002 by the parliament of India and enacted by National Democratic Alliance (NDA) to prevent money laundering and also to provide for confiscation of property derived from money laundering. This move would require individuals and entities dealing with virtual assets to comply with the same anti-money laundering and counter-terrorism financing measures as those dealing with traditional financial assets.
This decision marks a significant step towards the regulation of the cryptocurrency market in India. The government has been grappling with the issue of regulating cryptocurrencies for some time, as their popularity has grown in the country.
An extremely cautious approach was taken by the Indian government along with the Reserve Bank of India (RBI) towards cryptocurrencies wherein, banks were banned from dealing with cryptocurrency exchanges. However, the Supreme Court of India overturned the ban last year, paving the way for the growth of the cryptocurrency market in the country.
This decision to include virtual assets under the PMLA is a step further to address the illegal use of cryptocurrencies in the country and also help in regulating the market. It is yet to be seen how this decision impacts the crypto market in India but surely investors and industry stakeholders are going to keep an eye on it.