Switzerland Advances Crypto Asset Information Sharing with India
Switzerland has introduced a proposal to establish an automatic exchange of information (AEOI) on cryptocurrency assets with India and 73 other countries. This initiative aims to enhance transparency and support efforts to track virtual currency holdings held abroad.
Existing Financial Information Exchange Framework
Currently, India and Switzerland maintain an automatic exchange framework for banking and other financial assets. This mechanism enables the yearly transfer of data regarding assets held by residents of one country in the other's financial institutions. This system has previously aided Indian authorities in identifying numerous cases involving undisclosed foreign funds.
Extension to Crypto Assets
The new proposal seeks to expand this framework to include crypto assets, a sector that remains relatively less regulated in India but is increasingly scrutinized due to potential anti-money laundering concerns.
- 74 countries, including India, European Union members, the United Kingdom, and most G20 nations (excluding the United States and Saudi Arabia), are designated under this proposed list.
- The automatic exchange is slated to come into effect on January 1, 2026, pending parliamentary approval.
- The first data exchange is expected in 2027.
Regulatory and Compliance Considerations
Exchange of information will proceed only if partner states agree to collaborate and comply with the Crypto-Asset Reporting Framework formulated by the Organisation for Economic Co-operation and Development (OECD). Prior to initiating exchanges, the Swiss Federal Council will conduct reviews to ensure ongoing compliance with OECD standards.
The existing mechanisms for reviewing financial account AEOI will be expanded to encompass crypto assets, necessitating amendments in federal decrees to support this extension.
Implications for India and Global Financial Transparency
While India has not yet enacted formal cryptocurrency regulations, the government enforces anti-money laundering guidelines relating to virtual currencies. The Reserve Bank of India (RBI) has expressed concerns about the implications of cryptocurrencies for financial stability, even as other nations recognize them as legal tender.
Given suspicions about significant undisclosed crypto holdings by Indian residents abroad, the proposed framework aims to bolster government efforts to identify and address such assets, enhancing international cooperation on fiscal transparency.
