SEBI Open to Crypto Oversight, Diverges from RBI Stance
India's Securities and Exchange Board of India (SEBI) has put forward a proposal recommending that the oversight of cryptocurrency trade be divided among various regulators. This recommendation signals an openness among some regulatory bodies to accommodate private virtual assets within India's financial landscape. The suggestion is notably divergent from the Reserve Bank of India's (RBI) position, which has consistently viewed private digital currencies as a threat to the country's macroeconomic stability.
The SEBI's proposal, which has not been publicly reported prior, has been submitted to a government panel that is responsible for creating policies for the finance ministry. In this proposal, SEBI advocates for the distribution of regulatory responsibilities based on the domain of the cryptocurrency activities rather than establishing a single, centralized regulatory authority for all digital assets. Additionally, SEBI has recommended that investor grievances related to cryptocurrency trading should be addressed under the Consumer Protection Act of India.
This recommendation comes against the backdrop of the RBI's stringent approach, which began in 2018 with a ban on lenders and financial intermediaries from engaging with cryptocurrency exchanges and users. This ban was later overturned by the Supreme Court of India. SEBI's multi-regulatory approach proposal also suggests the issuance of licenses for crypto products related to the equity market and emphasizes the need for regulatory clarity regarding new financial instruments such as Initial Coin Offerings (ICOs).
