Indian regulator suggests collaborative approach involving multiple agencies to regulate cryptocurrency
India’s Securities and Exchange Board of India (SEBI) has put forward a proposal for a multi-agency approach to oversee the cryptocurrency sector in the country. According to documents disclosed by Reuters, SEBI recommended that various regulators collaborate to monitor different aspects of cryptocurrencies. Under the proposal, SEBI would be responsible for monitoring cryptocurrencies classified as securities, as well as initial coin offerings, and issuing licenses for related products. The Insurance Regulatory and Development Authority of India would handle all crypto-related insurance cases, while the Pension Fund Regulatory and Development Authority would regulate pension-related matters involving cryptocurrencies. The proposal also suggests using the nation’s Consumer Protection Act to resolve investor disputes. The Reserve Bank of India (RBI) would oversee fiat-backed stablecoins, although the regulator has shown a more skeptical stance towards cryptocurrencies and has raised concerns about tax evasion and financial stability. Meanwhile, the RBI believes that cryptocurrencies would lead to revenue losses for central banks due to a decline in money creation. The proposal has been hailed as a significant first step in creating domestic legislation for the cryptocurrency sector by Dilip Chenoy, chairman of the Bharat Web3 Association (BWA), who added that the government has sought industry input to shape its regulatory approach. In the meantime, Indian regulators have been urging foreign cryptocurrency service providers to obtain licenses from the Financial Intelligence Unit (FIU). Only KuCoin and Binance have complied with the requirements so far. The FIU has also been involved in initiatives to promote compliance with anti-money laundering and countering the financing of terrorism frameworks among market participants in India.
