Securities and Exchange Board (SEBI) of India has suggested a collaborative approach to regulating cryptocurrency trading, proposing shared oversight among various authorities. This recommendation comes amidst ongoing discussions within a government panel tasked with formulating crypto policy.
SEBI’s Proposal for Crypto Oversight
SEBI’s recommendation to the government panel, expected to submit its report to the Finance Ministry by June, advocates for a multi-agency approach to crypto regulation. According to documents cited by Reuters, SEBI proposes monitoring cryptocurrencies resembling securities and overseeing initial coin offerings (ICOs).
Contrasting Views with RBI
SEBI’s stance differs from that of the Reserve Bank of India (RBI), which reportedly favors a ban on stablecoins, viewing cryptocurrencies as a threat to policy sovereignty. The RBI’s position highlights the ongoing debate within India’s regulatory landscape regarding the future of cryptocurrencies.
Under SEBI’s proposal, the RBI would regulate assets backed by fiat currencies, such as stablecoins, while the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA) would oversee insurance and pension-related virtual assets, respectively.
SEBI also suggests resolving investor grievances related to cryptocurrencies under India’s Consumer Protection Act, emphasizing the need for consumer protection in the rapidly evolving crypto market.
Uncertainty Amidst National Elections
India’s crypto policy remains uncertain amidst national elections, with results expected by June 4. Despite calls for clarity, the country’s Finance Ministry has refrained from declaring crypto as legal or illegal, while imposing significant taxes on the industry.
Signals of Credibility Change
While regulatory clarity remains elusive, signals of credibility change for crypto have emerged. Last year, India’s Finance Ministry led efforts to establish global consensus on crypto regulation as G20 president. Additionally, the registration of over 46 crypto-related firms with the nation’s financial intelligence unit indicates a shifting perspective on crypto legitimacy.
Despite these developments, SEBI, RBI, India’s Finance Ministry, IRDAI, and PFRDA have not responded to requests for comment, leaving the crypto community and investors awaiting official guidance on the future of crypto regulation in India.
