India’s SEBI Recommends Multiple Regulators for Crypto, RBI Cites Macroeconomic Risks

The Securities and Exchange Board of India (SEBI) has proposed a framework for regulating crypto assets, suggesting that different aspects of cryptocurrency trade be overseen by various regulators. This recommendation was submitted to a government panel tasked with developing policy for the finance ministry. SEBI's approach includes assigning regulatory responsibilities to different agencies, such as the Reserve Bank of India (RBI) for fiat-backed crypto assets, and the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA) for insurance and pension-related virtual assets.

Contrary to SEBI's recommendations, the RBI has expressed concerns about cryptocurrencies, labeling them as macroeconomic risks due to potential issues like tax evasion and threats to fiscal stability. The central bank's cautious stance contrasts with SEBI’s openness to assets like bitcoin and ether.

Currently, India lacks a specific regulatory framework for cryptocurrencies. Although a bill to regulate digital assets was drafted in 2021, it has yet to be introduced. As the president of the G20, India is pushing for a global regulatory framework for cryptocurrencies, with the Financial Intelligence Unit – India (FIU-IND) already overseeing 47 cryptocurrency-related entities.

What are your thoughts on SEBI’s recommendations for regulating cryptocurrency in India? Let us know in the comments section below.