During India's G20 presidency in 2023, the IMF and FSB published a synthesis paper outlining a global crypto regulatory framework. India committed to implementation and has been operationalising it since.
What the framework recommends
Comprehensive AML/CFT registration of VDA service providers (India implemented via PMLA extension). Macroprudential tools to monitor stablecoins (India: in progress, mostly via central-bank monitoring). Tax reporting integration (India: via AIS and Schedule VDA). Cross-border information sharing under FATF (India: active member, exchanges feed CARF-equivalent reporting).
Cross-border transparency
The Crypto Asset Reporting Framework (CARF), endorsed by the OECD in 2023, is the crypto equivalent of CRS for bank accounts. Once implemented globally, it means foreign exchanges report Indian residents' holdings to Indian tax authorities automatically.
India has signed up. Implementation timeline runs through 2027 with phased data exchanges. By then, the practical privacy of holding crypto on a foreign exchange evaporates.
What this means for traders
The 'go offshore' approach to lower compliance is a closing window. By 2027 every meaningful exchange will report to your home tax authority. Plan as if your foreign-exchange holdings are visible to the IT Department in real time.
Key takeaways
- India led the G20 crypto framework adoption in 2023.
- PMLA extension and AIS reporting were the early implementation steps.
- CARF (cross-border reporting) phases in through 2027.
- Plan as if all crypto holdings will be visible to Indian tax authorities by 2027.
