K.C. Cibin, School of Law, Christ (Deemed to be University)
ABSTRACT
Cryptocurrency a revolutionary technology aimed at cashless transfer is considered a checkmate to the financial puppeteers though first envisioned in 1980 gained prominence with the advent of Bitcoin in 2009. A decentralized and secure technology with no tangible form of currency with fast and anonymous transfer capability. However, this anonymity has linked it with various illicit activities like money laundering and terror financing, thereby showing how destructive it can be if not regulated. Countries around the world have adopted distinct paths to regulate cryptocurrencies. This research explores the cryptocurrency regulation in India with a focus on combatting money laundering and cross-border terror financing and compares it with the EU's MiCA (Markets in Crypto-Assets) and AMLD5 (Anti-Money Laundering Directive) regulations. The major difference between India and the EU is the legislation governing cryptocurrency where the EU has comprehensive legislation such as the MiCA, but crypto in India is governed by multi-faceted legislation such as RBI notifications, the PMLA, and FEMA, while the EU has developed MiCA to address the challenges posed by cryptocurrencies. India's regulation primarily focuses on consumer protection, lacking measures for seller regulation, whereas the EU establishes approved Cryptoasset Service Providers (CASPs). The need for a dedicated regulatory body in India, akin to the EU, is emphasized to address the challenges posed by illicit cryptocurrency activities. Further, this research also discusses the Indian Digital Act Regime and the potential for a National Data Governance Framework Policy to enhance data management in the blockchain and AI industries. This research compares these legislations and analyzes the challenges and opportunities in this sector with an emphasis on the regulations towards money laundering and terror financing.
Keywords: Cryptocurrency, EU, MiCA, PMLA, Terror Financing
