1.India's Cryptocurrency Policy Concerns (Cryptocurrency Regulation)
What & Where
MoU between Pakistan’s Crypto Council & US-based World Liberty Financial Inc to build crypto-based financial system
Covers launch of stablecoins, tokenisation of rare-earth assets, aim to make Pakistan a South-Asia crypto hub
Backed by Pakistan PM Shehbaz Sharif & Army Chief Asim Munir; raises security concerns for neighbouring India
Quick Facts for MCQs
Security Dimension
- Terror-financing risk highlighted; crypto shares hawala traits enabling pseudo-anonymous cross-border transfers
- Lack of Indian regulator hampers FIU-IND monitoring of suspect wallets and exchanges
- Early Pakistani adoption could erode India’s strategic tech edge similar to past nuclear intelligence lapse
Legal & Policy
- India taxes crypto without statute; no dedicated regulator or grievance redressal like SEBI / RBI
- Supreme Court urged legislative clarity; current vacuum exposes investors and macro-stability
- Proposal emerging for Digital Asset Regulatory Authority integrating monetary, cyber and compliance roles
Geopolitical Angle
- Pakistan leveraging US diaspora to court Trump-linked investors, seeking tech diplomacy traction in Washington
- WLFI pact could shift regional influence, diluting India’s existing advantage in emerging technologies
- Coordination advised with G20, FATF, IMF to shape cross-border standards and retain normative leadership
Tech & Schemes
- Plan includes blockchain for financial inclusion, trade settlement, asset tokenisation of rare-earth elements
- India urged to accelerate e₹ rollout, integrate with fintech stack, avoid private-crypto vacuum
- Awareness drives needed to educate 100 + million Indian users on risks, legality, and reporting norms
Key Data Points
| Feature | Data-Point |
|---|---|
| US firm involved | World Liberty Financial Inc (WLFI) |
| Pakistani partner | Newly formed Pakistan Crypto Council |
| Indian crypto tax | 30 % on gains + 1 % TDS on transfers |
| Indian user base (Triple-A) | 100 + million |
| Supreme Court remark | May 2025 flagged absence of crypto law |
| Major Indian fraud cited | ₹900 crore GainBitcoin scam |
| India CBDC status | e₹ pilot ongoing, limited retail linkages |
| Global watchdog on terror finance | FATF |
Related UPSC Prelims PYQs
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