According to a recent exclusive media report, the Securities and Exchange Board of India (Sebi), India's market watchdog suggested that several regulators oversee trade in cryptocurrencies, which indicates that there are certain authorities in the country, who are still open to allowing the use of private virtual assets. Sebi’s stance differs from the Reserve Bank of India's (RBI), which maintains that private digital currencies represent a macroeconomic risk, separate documents show.
Both sets of documents have been submitted to a government panel which is tasked with formulating policy for the finance ministry to consider. So far, Sebi’s position has not been reported. Also, India has taken a strict stance on cryptocurrencies since 2018, when the central bank prohibited lenders and other financial intermediaries from dealing with crypto users or exchanges. This ban was later canceled by the Supreme Court. In 2021, the government drafted a bill to ban private cryptocurrencies though it has not been introduced. Last year, when it was president of the G20, India called for a global framework to regulate these assets.
Says Ashish Singhal, co-founder, CoinSwitch, a crypto app: “Encouraging views on #crypto from the Sebi which has overseen India’s thriving stock markets. An enabling regulatory environment has paved the way for greater consumer adoption in several other sectors in the past such as telecom, information technology, e-commerce, etc. This is a start and many nuances will need to be discussed. Nevertheless, great news for crypto in India. Good to see indications of a consultative approach to crypto asset regulation in India. We continue to engage with the right stakeholders to create a balanced policy and regulatory environment.”
The RBI still supports a ban on stablecoins, according to a recent media report. According to the media report, a source said, who wished to remain anonymous, that the panel aimed to finalize its report by June. Stablecoins are cryptocurrencies designed to keep a stable exchange rate with fiat currencies, making them less prone to extreme volatility.
In its submissions to the government panel, Sebi suggested that different regulators should oversee activities linked to cryptocurrencies that fall under their domain and that a single unified regulator for digital assets should be avoided. Sebi indicated it could oversee cryptocurrencies that take the form of securities as well as new offerings called Initial Coin Offerings (ICO). Moreover, it could issue licenses for products related to the equity market, according to the source familiar with the panel's discussion.
Sebi suggested it could oversee cryptocurrencies that take the form of securities as well as new offerings called Initial Coin Offerings (ICO). According to the person aware of the panel's discussion, it could also issue licenses for equity market-related products.
