- As per the recent updates by SEBI on Crypto trading in India, it has asked the local regulators to monitor activities related to crypto trading in India. According to the Indian SEBI, multiple regulators should be involved in this task of monitoring.
- According to the documents, India’s financial agencies must carry out regulatory monitoring of crypto trading. The Reserve Bank of India (RBI) stated in a different document that the nation’s macroeconomic stability is at risk from digital currencies.
- The government representatives sent the files to a group that was given the responsibility of providing policy recommendations to The Finance Ministry of India.
- In place of a single local regulator handling digital assets, SEBI suggested that various authorities work together to supervise digital assets operations that fall within their authority.
- In this scenario, SEBI would oversee digital assets categorized as securities, grant licenses for financial goods, and keep an eye on initial coin offerings. Stablecoins backed by fiat would be supervised by the Reserve Bank in the short term.
- The Pension Fund Regulatory and The Development Authority will handle pension issues pertaining to digital assets, while The Insurance Regulatory will regulate insurance connected to cryptocurrencies. Investor conflicts should be governed under India’s Consumer Protection Act.
- The Reserve Bank of India is less hopeful about cryptocurrencies. As per the sources of ReadingCrypto, RBI is in favor of prohibiting stablecoins as it is worried about digital assets being used as a tool for tax evasion.
- Further, RBI believes that voluntary compliance is necessary for decentralized peer-to-peer cryptocurrencies. However, this can prove to be risky for the economy’s stability and even lead to loss of income from money creation for central banks.
- India has been attempting to include digital assets in its regulatory structure. India blocked the websites and mobile apps of the companies for customers in the country in December 2023 after no action was taken towards the 15 notices of noncompliance being sent to these international cryptocurrency exchanges.
- The Financial Intelligence Unit (FIU-IND) is the central agency of India which is responsible for receiving, processing, and analyzing information related to doubtful financial transactions, enforcement agencies & foreign FIUs.
- At the time of writing, KuCoin and Binance were the only exchanges that had the required license from the FIU-IND to restart their operations.
- Also, the Indian Government has called on the members of the G20 to join forces in regulating digital assets.
Happy Reading Crypto Enthusiasts!
