The government said in a March 7 notification that India's money-laundering laws will apply to trade in cryptocurrencies.
The exchange between virtual assets and fiat currencies, the exchange between one or more forms of virtual digital assets and the transfer of digital assets will be covered by money laundering laws, the notification said.
The notification stated that the safekeeping or administration of virtual assets and participation in financial services related to the offer and sale of virtual assets will also be covered.
India is yet to finalize legislation and regulations surrounding cryptocurrencies, even though the country's central bank cautioned against their use several times.
The Reserve Bank of India has said that cryptocurrencies should be banned as they are akin to a Ponzi scheme.
The authorities will have more authority over the transfer of assets beyond the country's borders by extending India's money laundering rules to cryptocurrencies.
The G- 20 forum is led by the Narendra Modi-led administration, which has been pushing for a wider global agreement on dealing with the risks brought on by cryptocurrencies.