SEBI, the Securities and Exchange Board of India, has refrained from engaging with the cryptocurrency sphere, expressing skepticism about the potential outcomes of legalizing cryptos or allowing the market to operate freely within the country. However, SEBI remains steadfast in supporting the promotion of Central Bank Digital Currency (CBDC) by the Reserve Bank of India (RBI).

Nevertheless, Madhabi Puri Buch, the SEBI Chief, mentioned a possible scenario where the crypto space could gain momentum if the traditional market fails to adapt. Buch highlighted how the crypto industry offers users the advantage of swift settlements and tokenization, either instantaneously or nearly so, depending on transaction volume.

This poses a challenge to traditional systems where transactions often take up to two days to settle, particularly in cross-border transactions. Cryptocurrencies expedite payment and securities trade finalizations, prompting plans to introduce similar features, potentially making India the second country after China to do so. The launch, tentatively set for March 2025, awaits approval from the SEBI Board. If greenlit, SEBI would proceed with implementing instant settlements.

Buch also acknowledged concerns raised by foreign portfolio investors regarding operational complexities in adjusting to faster settlement cycles.

While SEBI is currently hesitant to embrace cryptocurrencies, it has expressed openness to leveraging blockchain technology. In 2017, SEBI announced the establishment of the Committee on Financial and Regulatory Technologies (CFRT) to explore the potential applications of blockchain in regulatory oversight processes, asset management, post-trade settlement, and fundraising.

In essence, while SEBI maintains its stance against cryptocurrencies at present, it remains receptive to the possibility of leveraging blockchain technology if deemed beneficial. This development coincides with the ongoing surge in crypto prices, driven by increased investor adoption and demand, with BTC, for instance, trading at $73,464.40.