Indian Government Imposes Anti-Money Laundering Provisions on Virtual Digital Assets

Cryptocurrencies Not Illegal in India

The Indian Government has imposed Anti-Money Laundering (AML) provisions on Virtual Digital Assets (VDAs), as per a gazette notification issued on May 28, 2022. This move is in line with the global effort to combat money laundering and terrorist financing activities using cryptocurrencies.

Cryptocurrency Bill 2021

It's important to note that cryptocurrencies are not illegal in India. Individuals can still buy and trade in cryptocurrencies such as Bitcoin. However, the Cryptocurrency Bill 2021, which was introduced in the Lok Sabha to regulate cryptocurrencies, is still pending.

Finance Minister Nirmala Sitharaman's proposal to tax virtual assets has sparked a debate over the legality of cryptocurrencies in India. The government has yet to clarify the status of cryptocurrencies under the proposed law.

In early 2021, there were reports of a measure that would both outlaw private cryptocurrencies in India and establish a framework for the creation of a digital currency by the central bank. However, the government has not made any official announcement regarding this proposal.