Regulation
India softens its stance on cryptocurrencies! SEBI proposes a regulatory framework
That of India Securities and Exchange Board (SEBI) is taking the regulatory narrative around cryptocurrencies in a new direction, suggesting a multi-agency approach to oversight. This signals a significant departure from the Reserve Bank of India’s (RBI) previous stance of an outright ban.
Here’s what you should know.
Key details of the proposal
According to India’s SEBI, it may monitor the cryptocurrency sector involving new offerings such as initial coin offerings (ICOs). Furthermore, the regulatory agency has indicated that it may issue licenses for all crypto products related to the stock market.
Meanwhile, SEBI informed the government that Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority (PFRDA) should regulate all insurance-related virtual assets and pensions.
Specialized regulation in place
Regarding cryptocurrency-related complaints, India’s SEBI has recommended the implementation of the country’s Consumer Protection Act. SEBI’s proposal to the Indian government suggests that the RBI should regulate all crypto assets backed by fiat currencies.
In this regard, the RBI should further monitor concerns about cryptocurrency tax evasion and the fiscal stability risk posed by cryptocurrencies.
Regulations and governance
These developments come in the context of the Indian government’s preparations to formalize regulations governing the web3 industry and digital assets. Despite the imposition of a 30% cryptocurrency tax, the growing adoption of decentralized financial platforms reflects a growing acceptance of alternative financial systems to traditional banking.
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In a surprising twist, India’s Financial Intelligence Unit (FIU) recently announced the lifting of the ban on IPs associated with major cryptocurrency exchanges such as Binance and Kocoin. This move indicates a nuanced approach towards cryptocurrency exchanges, suggesting a more inclusive regulatory environment.