June 4, 2024
Policy & Regulation

SEBI Proposes Unified Oversight for Cryptocurrency Sector in India

Official documents disclosed by Reuters reveal that the Securities and Exchange Board of India (SEBI) has recommended collaborative efforts among different regulators to oversee the burgeoning cryptocurrency sector in the nation. The suggestions were presented to an advisory panel for India’s finance ministry, marking a potential shift in the regulatory landscape.

Unified Oversight Framework Proposed

Per the proposal, SEBI would play a pivotal role in monitoring cryptocurrencies classified as securities, along with overseeing initial coin offerings (ICOs) and issuing licenses for related products.

Additionally, all crypto-related insurance cases would fall under the domain of the Insurance Regulatory and Development Authority of India (IRDAI). The Pension Fund Regulatory and Development Authority (PFRDA) would take charge of regulating pension-related matters involving cryptocurrencies.

RBI’s Scepticism and Concerns

However, the Reserve Bank of India (RBI) has displayed a more sceptical stance towards cryptocurrencies, particularly fiat-backed stablecoins.

Sources familiar with the matter state that the RBI is in favour of an outright ban on stablecoins, citing concerns about tax evasion and risks to financial stability.

The regulator has also cautioned that decentralized peer-to-peer transactions in cryptocurrencies could undermine central banks’ revenue generated from money creation.

Industry Response and Push for Compliance

Commenting on the development, Dilip Chenoy, chairman of the Bharat Web3 Association (BWA), expressed optimism, stating that the proposal aligns well with the industry’s aspirations.

He highlighted the government’s call for industry input in shaping the regulatory approach, with BWA currently drafting a comprehensive document for this purpose.

Meanwhile, Indian regulators have been urging foreign cryptocurrency service providers to obtain licenses under the Financial Intelligence Unit (FIU). At present, only KuCoin and Binance have complied with the requirements.

FIU Director Vivek Aggarwal emphasized the importance of compliance with Anti Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework during a recent workshop for Virtual Asset Service Providers (VASPs).

As India navigates the complexities of regulating the cryptocurrency sector, collaboration among regulators and industry stakeholders appears crucial for fostering a balanced and sustainable framework.

Image by freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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