In the same way that the US SEC has legitimized cryptocurrencies via its regulation, SEBI may choose to do the same in India.
The Indian government has taken a cautious approach to the cryptocurrency business since 2018. The Securities and Exchange Board of India (SEBI) has been mum on the subject of possible changes, according to a recent statement cited by Reuters.
In a recent statement, SEBI expressed its openness to interacting with the burgeoning cryptocurrency sector by mentioning that it may study regulatory measures. There may soon be a friendlier climate in India for crypto fans and investors, thanks to this change.
Reuters reports that the market regulator in India has suggested a system where several bodies would be responsible for monitoring crypto trade. Reuters cites records showing that the Securities and Exchange Board of India (SEBI) presented this suggestion to a government committee in charge of formulating policy inside the Indian finance ministry. By June, the group hopes to have completed its report.
The Reserve Bank of India (RBI) allegedly backs a prohibition on stablecoins, in opposition to SEBI’s position. The Reserve Bank of India has long voiced its worry that cryptocurrency may undermine national policymaking authority.
Cryptos that are structured like securities and initial coin offerings (ICOs) might be subject to regulation by SEBI. It may also provide authorization for goods and services connected to the stock market. If this were to occur, it would mirror the US SEC’s approach to regulating tokens inherent to cryptocurrency exchanges.
Additionally, stablecoins and other assets backed by fiat currencies were suggested as potential areas for regulation by RBI. In addition, the Pension Fund Regulatory and Development Authority (PFRDA) and the Insurance Regulatory and Development Authority of India (IRDAI) might work together to oversee virtual assets connected to pensions and insurance.
According to Reuters, India’s Consumer Protection Act is being considered as a possible framework for the settlement of cryptocurrency investment complaints.
Cryptocurrency has left RBI puzzled since 2018. It draws attention to the potential for tax evasion and the damage it may do to government finances. It has concerns about the potential challenges in controlling and supervising decentralized peer-to-peer activities since it views them as dependent on voluntary participation.
Another reason the RBI is worried is that cryptocurrency-related revenue loss might be owing to money printing. Despite the Supreme Court’s decision to halt the Reserve Bank of India’s (RBI) 2018 instructions to financial institutions, the central bank has reiterated the need for stringent anti-money-laundering and foreign exchange laws, effectively excluding cryptocurrency from India’s official financial system.
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