SEBI Proposes Multiple Regulators for Cryptocurrency Regulation in India
The Securities and Exchange Board of India (SEBI) has submitted its recommendations for regulating crypto assets to a government panel, according to reports from Reuters. SEBI’s proposal suggests that multiple regulators oversee different aspects of cryptocurrency trade, demonstrating a willingness to embrace assets like bitcoin and ether. The watchdog advocates for various regulators to manage cryptocurrency activities within their respective domains, rejecting the idea of a unified regulator. SEBI would be responsible for monitoring cryptocurrencies that resemble securities, overseeing initial coin offerings (ICOs), and issuing licenses for equity market-related products.
Under SEBI’s proposal, the Reserve Bank of India (RBI) would be assigned the task of regulating crypto assets backed by fiat currencies. Additionally, 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. SEBI also recommends addressing investor grievances under India’s Consumer Protection Act.
This approach taken by SEBI stands in contrast to the stance of the RBI, which views private digital currencies such as bitcoin and ether as a macroeconomic risk. The central bank has expressed concerns that cryptocurrencies could facilitate tax evasion, and it believes that decentralized peer-to-peer (P2P) activities in cryptocurrencies would rely on voluntary compliance, posing risks to fiscal stability.
India currently lacks a specific regulatory framework for cryptocurrencies, although a government panel drafted a bill in 2021 to address this issue. However, the bill has not been introduced yet. As the president of the G20, India has advocated for a global regulatory framework for cryptocurrencies. The Financial Intelligence Unit – India (FIU-IND) currently oversees 47 cryptocurrency-related entities and has recently approved Binance and Kucoin as Virtual Asset Service Providers. In March, the Indian finance minister stated that she expects a regulatory framework for crypto to emerge from G20 discussions.
What are your thoughts on SEBI’s recommendations for regulating cryptocurrency in India? Let us know in the comments section below.
