India extends money laundering laws to trade in cryptocurrencies

In a notification issued on March 7th, India's government said its money laundering laws will apply to trade in cryptocurrencies.

Under money laundering laws, the exchange between virtual digital assets and fiat currencies will be covered by the notification, which notes that the exchange between one or more forms of virtual digital assets and the transfer of digital assets will be covered.

The notification adds that the safekeeping or administration of virtual digital assets and participation in financial services related to the offer and sale of virtual digital assets will also be covered.

While the central bank has warned against the use of cryptocurrencies, India has yet to finalise laws and regulations regarding cryptocurrencies.

The Reserve Bank of India has called for the ban on cryptocurrencies as they are similar to a Ponzi scheme.

The extension of India's money laundering regulations to cryptocurrencies will provide authorities with a greater authority in tracking the transfer of these assets beyond the country's borders.

As part of its leadership of the G-20 forum, the Narendra Modi-led government has been advocating for a wider global agreement on addressing the risks brought on by cryptocurrencies.