India’s Market Regulator Suggests Shared Crypto Oversight Even as RBI Seeks Stablecoin Ban: Reuters

As an analyst with a background in financial regulation and experience following the cryptocurrency market in India, I believe that the suggested multi-regulator approach to overseeing cryptocurrency trading is a step in the right direction. The complex nature of the cryptoasset industry warrants specialized oversight from various regulatory bodies.

According to Reuters, India’s securities regulatory body proposes that multiple institutions oversee the management of cryptocurrency trades.

According to Reuters, SEBI proposed a recommendation to the government committee responsible for drafting financial policy for the Ministry of Finance to take into account. The committee is expected to present their findings by June.

According to a source privy to the panel’s deliberations, SEBI holds a contrasting perspective to that of the Reserve Bank of India (RBI). While the RBI continues to advocate for a prohibition on stablecoins, SEBI harbors a different viewpoint. The RBI has consistently expressed concern over cryptocurrencies, viewing them as a potential risk to monetary policy control.

Based on the findings in the report, SEBI announced it would regulate cryptocurrencies identified as securities and initial coin offerings (ICOs). The RBI was tasked with overseeing stablecoins backed by fiat currencies. Lastly, IRDAI and PFRDA were responsible for managing virtual assets related to insurance and pension funds respectively.

The report recommends addressing investor complaints concerning cryptocurrencies through India’s Consumer Protection Act.

India is currently holding nationwide elections, and the election results are set to be announced on June 4. According to Jayant Sinha, who heads the Parliament’s Standing Committee on Finance, India may not introduce a cryptocurrency or Web3-related legislative bill in the near future. It’s possible that such a bill might not even be presented before mid-2025.

The Finance Ministry in India has taken a leading role in shaping the country’s cryptocurrency regulations. However, it remains unclear whether the ministry considers crypto as legal or illegal tender within India’s borders. What is known is that the industry faces significant tax burdens.

However, signals of credibility change for crypto have been emerging.

Last year, during its tenure as G20 president, the Finance Ministry spearheaded efforts to establish a global agreement on cryptocurrencies. However, an official subsequently stated that India would take time to determine its own stance on crypto in the upcoming months. More recently, another ministry officer indicated that the registration of over 46 crypto-related businesses with the financial intelligence unit suggests a change in perception towards these firms, although the legitimacy aspect remains under review by policymakers.

The representatives from SEBI, RBI, India’s Finance Ministry, IRDAI, and PFRDA did not provide comments in response to CoinDesk’s request for clarification.