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

BY Coindesk | ECONOMIC | 05/16/24 07:17 AM EDT By Amitoj Singh
  • India's markets regulator has suggested that several regulators oversee trade in cryptocurrencies, Reuters reported.
  • The suggestion was made to a government panel tasked with formulating policy for the Finance Ministry to consider.

India's markets regulator has recommended that oversight of cryptocurrency trading should be vested in several authorities, Reuters reported.

The Securities and Exchange Board of India's (SEBI) suggestion was made to a "government panel" tasked with formulating policy for the finance ministry to consider, Reuters said, citing documents. It added that the panel could submit its report by June.

SEBI's position differs from that of the Reserve Bank of India (RBI), which "remains in favour of a ban on stablecoins," according to a person with direct knowledge of the panel's discussions cited by the report. The RBI has repeatedly said it views cryptocurrencies as an existential threat to policy sovereignty.

According to the report, SEBI said it could monitor cryptocurrencies that take the form of securities as well as initial coin offerings (ICO); the RBI could regulate assets backed by fiat currencies such as stablecoins; and the Insurance Regulatory and Development Authority of India (IRDAI) could oversee insurance and pension related virtual assets with the Pension Fund Regulatory and Development Authority (PFRDA).

Investor grievances in cryptocurrencies should be resolved under India's Consumer Protection Act, the report said.

India is in the middle of national elections, with results scheduled for June 4. Jayant Sinha, chair of the parliament's Standing Committee on Finance told CoinDesk in December that the country is unlikely to bring a crypto or Web3-specific legislative bill anytime soon, possibly not before mid-2025.

India's crypto policy has largely been in the hands of the Finance Ministry, which has refused to say whether crypto is legal or illegal in the nation, while imposing stiff taxes on the industry.

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

Last year, the Finance Ministry led India's push as G20 president to frame global consensus around crypto. An official later said India would analyse and decide its own position on crypto in the coming months. Last week, a different ministry official said the registration of more than 46 crypto-related firms with the nation's financial intelligence unit signals a credibility shift, even if legitimacy falls under the purview of policy makers.

SEBI, RBI, India's Finance Ministry, IRDAI and PFRDA did not respond to a CoinDesk request for comment.

Read More: Binance, KuCoin Win Registration From India Anti-Money Laundering Regulator as Crypto Credibility Improves

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