No timeline for introduction of regulatory guidelines for virtual digital assets industry: MoS Finance

Union Minister of State for Finance Pankaj Chaudhary speaks in Lok Sabha.
| Photo Credit: ANI

There is no timeline for introduction of comprehensive regulatory guidelines for the Virtual Digital Assets (VDA) industry, Parliament was informed on Monday (December 16, 2024).

Virtual Digital Assets (VDAs) are by definition borderless and require international collaborations to prevent regulatory arbitrage.

Therefore, any comprehensive regulatory framework on the subject can be effective only with significant international collaborations on evaluation of the risks and benefits and evaluation of common taxonomy and standards, Minister of State for Finance Pankaj Chaudhary said in a written reply in the Lok Sabha.

Further, he said, the need to balance investor protection and innovation must be assessed in light of the broader objective of protecting the Indian economy from the risks posed by the VDA sector while maintaining the financial and monetary stability of the economy.

Moreover, he said, due to the cross-border and digital nature of this sector, investor protection measures can only mitigate certain risks to a limited extent and cannot entirely eliminate them.

The government has undertaken formal and informal consultation with stakeholders including industry and with relevant international organisations from time to time on policy formulation of crypto assets.

“There is, however, no timeline anticipated for introduction of comprehensive regulatory guidelines for VDA industry in India,” he said.

Replying to another question, Mr. Chaudhary said debt-to-Gross State Domestic Product (GSDP) ratio is the highest for Arunachal Pradesh at 50.4%.

It is followed by Punjab at 47.6% and Nagaland 44.3% in debt to GSDP ratio, he said.

In terms of performers, he said, debt-to-GSDP ratio is the lowest for Odisha at 13.9 per cent, followed by Gujarat at 18.2 per cent and Maharashtra at 18.6 per cent at the end of March 2024.

In a separate reply, Chaudhary said, the Reserve Bank of India (RBI) has been working towards linking Unified Payments Interface (UPI) with the Fast Payment Systems (FPSs) of other countries to facilitate cross-border payments.

Such facility has already been made live with Singapore effective February 2023, he said.

This has helped Indian customers to send and receive money directly through UPI, which in turn brings down the average cost of these cross-border remittances from Singapore to India and vice-versa, he said.

Interlinking of UPI with fast payment systems of other countries may aid in strengthening the remittance economy of India.

It provides a 24×7 real-time, transparent, accessible, and cost effective mobile app-based alternative for making remittance payments to India, thereby enhancing the convenience compared to the traditional modes of making remittance payments, he said.