India encourages G20 to introduce automatic exchange of information on cryptocurrencies
Indian finance minister Nirmala Sitharaman called on G20 representatives to add virtual currencies to the automatic information exchange.
The statement was made during the ministerial meeting on tax and development in Bali.
India’s finance minister suggested that G20 nations add non-financial assets, including real estate and cryptocurrencies, to the automatic exchange of information between countries.
Nirmala Sitharaman. Source: Wikipedia
According to Sitharaman, numerous investigations have shown a close link between digital currencies and fraud. In particular, lawbreakers often use cryptocurrencies to hide unreported assets and evade taxes.
Developing an effective system for regulating virtual currencies is a priority for the Indian government. Tax transparency is among the key elements of the global strategy that states are working on.
The minister is confident that by taking a common position on cryptocurrencies, the G20 states will be able to counter decentralized digital assets and related offenses, including money laundering and terrorist financing.
Why is India insisting on the AEOI?
Given India’s recent legislative innovations, many experts believe that the country’s government has targeted the crypto industry and is taking consistent measures to destroy the market. Due to the unfavorable situation, major crypto traders are moving to other countries or using offshore companies to work.
How will the automatic exchange of information affect virtual currencies and Indian crypto investors? According to this international standard, states regularly collect data on foreign taxpayers and transmit them to the country of residence. With such measures, India will get help in verifying tax declarations and identifying possible violations of the crypto industry participants.