Key Takeaways:
- SEBI suggests multiple regulators oversee cryptocurrency trading in India, dividing responsibilities among various financial authorities.
- The Reserve Bank of India (RBI) highlights macroeconomic risks posed by digital currencies and supports banning stablecoins.
- India is enhancing its regulatory framework, recently blocking non-compliant foreign crypto exchanges and advocating for G20 collaboration on digital asset regulation.
The Securities and Exchange Board of India (SEBI) has suggested that multiple regulators oversee cryptocurrency trading in the country, according to documents seen by Reuters.
The documents propose that different divisions within India’s financial authorities handle regulatory oversight.
Exclusive: India's SEBI open to oversight of crypto trade, in contrast to Reserve Bank https://t.co/07JhlsLqNG pic.twitter.com/CPAneY5dz7
— Reuters (@Reuters) May 16, 2024
The Reserve Bank of India (RBI) also highlighted in a separate document that digital currencies pose a macroeconomic risk to the country.
Government officials submitted the documents to a panel advising the finance ministry on policy.
SEBI recommended that instead of a single unified regulator, different regulators should collectively oversee digital asset activities within their respective jurisdictions.
SEBI knows very well crypto is the future and we can’t ignore it.
— Pushpendra Singh (@pushpendrakum) May 17, 2024
We are continue seeing positive news from Sebi side.
Few months ago SEBI chairperson itself gave positive comment :
During a press conference, the Chair of the Securities and Exchange Board of India (SEBI),… pic.twitter.com/FyLmOKJSAu
SEBI would monitor digital assets classified as securities and initial coin offerings, as well as issue licenses for financial products.
The Reserve Bank would oversee fiat-backed stablecoins.
Crypto-related insurance would fall under the Insurance Regulatory and Development Authority of India, while the Pension Fund Regulatory and Development Authority would regulate pension matters related to digital assets. Disputes between investors would be covered by India’s Consumer Protection Act.
SEBI & RBI to regulate Crypto by end of 2024? pic.twitter.com/L2NpiHf1QE
— Aditya Singh (@CryptooAdy) May 16, 2024
The RBI maintains a more cautious stance on cryptocurrencies.
According to sources, the RBI supports banning stablecoins and has expressed concerns that digital assets could facilitate tax evasion and rely on voluntary compliance, posing risks to fiscal stability.
The RBI also noted that cryptocurrencies could lead to a loss of income from money creation for central banks.
SEBI recommendation to GOI on which Department should regulate which Crypto Sector. pic.twitter.com/qrRbTUBiQM
— Crypto India (@CryptooIndia) May 16, 2024
India has been adjusting its regulatory framework to include digital assets.
In December 2023, the country issued 15 notices of noncompliance to foreign crypto exchanges, blocking their URLs and mobile applications for local users.
Currently, KuCoin and Binance are the only exchanges that have obtained licenses from the Financial Intelligence Unit to resume operations.
🇮🇳 SEBI involvement was inevitable and aligns with what other G20 nations are doing.
— Aditya Singh (@CryptooAdy) May 17, 2024
But the real question is – Will SEBI understand the potential & urge GOI to bring down crypto Tax.
Or they will scrutinize crypto just like SEC is doing in the US without providing clarity.
Recently, the Indian government called on G20 members to collaborate in regulating digital assets.
About The Author
Victor Fawole, a seasoned Web3 content creator and social media influencer, excels in bringing the pulse of the crypto world to our readers.
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