India’s Securities and Exchange Board (SEBI) is pushing for a collaborative approach to oversee the cryptocurrency sector, involving multiple regulatory bodies.
According to documents shared by Reuters, SEBI has suggested that different regulators work together to manage the cryptocurrency industry in India. These recommendations were presented to an advisory panel for India’s finance ministry.
Under this proposal, SEBI would oversee cryptocurrencies classified as securities, handle initial coin offerings, and issue licenses for related products.
Insurance-related cryptocurrency cases would fall under the Insurance Regulatory and Development Authority of India, while the Pension Fund Regulatory and Development Authority would manage pension-related crypto issues.
The proposal also recommends using the nation’s Consumer Protection Act to resolve investor disputes.
The Reserve Bank of India (RBI) would oversee fiat-backed stablecoins, although the RBI has expressed skepticism towards cryptocurrencies. Sources indicate that the RBI supports a complete ban on stablecoins, citing concerns about tax evasion and financial stability risks due to decentralized peer-to-peer crypto transactions. The RBI also worries that cryptocurrencies could reduce central bank revenue from money creation.
Dilip Chenoy, chairman of the Bharat Web3 Association (BWA), told crypto.news, “This development marks a significant first step toward creating domestic legislation for the sector. The proposal to form an inter-ministerial body to manage Virtual Digital Assets (VDAs) aligns well with the industry’s aspirations, given the diverse applications of these assets.” Chenoy added that the government has sought industry input to help shape the nation’s regulatory approach, and the BWA is currently drafting a comprehensive document to contribute to this effort.
Additionally, Indian regulators have been advocating for foreign cryptocurrency service providers to be licensed under the Financial Intelligence Unit (FIU). So far, only KuCoin and Binance have complied. The FIU has also been active in promoting compliance among market participants in India. Speaking at a recent training workshop for Virtual Asset Service Providers (VASPs), FIU Director Vivek Aggarwal emphasized the importance of adhering to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) frameworks.
Summary Review: India’s proposed multi-agency approach to cryptocurrency regulation marks a significant step towards comprehensive oversight of the sector. By involving various regulatory bodies such as SEBI, the Insurance Regulatory and Development Authority, the Pension Fund Regulatory and Development Authority, and the Reserve Bank of India, the country aims to address the diverse aspects of the crypto industry. This collaborative effort is expected to enhance consumer protection, ensure financial stability, and address concerns like tax evasion and money laundering. Dilip Chenoy of the Bharat Web3 Association highlighted the importance of this development, noting that it aligns well with industry aspirations and marks a positive move towards establishing clear domestic legislation. The engagement of multiple agencies reflects the complex nature of the cryptocurrency landscape and the need for specialized oversight in different areas. As Indian regulators push for compliance from both domestic and foreign cryptocurrency service providers, the emphasis on adhering to Anti-Money Laundering and Countering the Financing of Terrorism frameworks is crucial. The ongoing efforts to draft comprehensive regulatory documents and promote compliance demonstrate India’s commitment to creating a secure and well-regulated crypto environment. This approach not only aims to protect investors and maintain financial stability but also positions India as a proactive player in the global cryptocurrency market. As the nation navigates these regulatory challenges, the outcome will likely set a precedent for other countries grappling with similar issues in the rapidly evolving digital asset space.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
