India’s Securities and Exchange Board (SEBI) is steering the regulatory narrative on cryptocurrencies in a fresh direction, suggesting a multi-agency approach to oversight. This signals a significant departure from the past stance of the Reserve Bank of India (RBI), which leaned towards an outright ban.
Here’s what you should know.
Key Details of the Proposal
According to India’s SEBI, it could monitor the cryptocurrency sector involving new offerings such as initial coin offerings (ICOs). Additionally, the regulatory agency indicated that it could issue licenses for all equity market-related crypto products.
Meanwhile, SEBI informed the government that the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA) should regulate all insurance and pension-related virtual assets.
Specialized Regulation in Place
As for crypto-related grievances, India’s SEBI recommended that the country’s Consumer Protection Act be implemented. The SEBI submission to the Indian government suggested that the RBI should regulate all crypto assets backed by fiat currencies.
In this regard, the RBI should further monitor concerns over crypto tax evasion and fiscal stability risk posed by cryptocurrencies.
Regulations and Governance
These developments come against the backdrop of the Indian government’s preparations to formalize regulations governing the web3 industry and digital assets. Despite the imposition of a 30 percent crypto tax, the increasing adoption of decentralized financial platforms reflects a growing acceptance of alternative financial systems beyond traditional banking.
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In a surprising turn, India’s Financial Intelligence Unit (FIU) recently announced the lifting of the ban on IPs associated with major crypto exchanges like Binance and Kocoin. This move signifies a nuanced approach towards crypto exchanges, hinting at a more inclusive regulatory environment.
