SEBI Proposes a Multi-Regulator Approach for Crypto Trading, Differing From RBI’s Concerns

India’s market regulator, the Securities and Exchange Board of India (SEBI), has proposed that multiple regulators oversee cryptocurrency trading, according to documents, marking the clearest indication yet that some authorities in the country may be open to the use of private virtual assets.

This position by the Securities and Exchange Board of India (SEBI) stands in contrast to that of the Reserve Bank of India (RBI), which argues that private digital currencies pose a macroeconomic risk, as revealed by separate documents.

According to a Reuters report, both sets of documents have been submitted to a government panel responsible for developing policy recommendations for the finance ministry. SEBI’s perspective has not been reported until now.

India has maintained a strict stance on cryptocurrencies since 2018, when the central bank barred financial institutions from dealing with crypto users or exchanges. Despite a proposed bill in 2021 to ban private cryptocurrencies, it remains unimplemented. Last year, as G20 president, India advocated for a global regulatory framework for such assets.

SEBI’s nuanced regulatory approach suggests different regulators oversee activities related to cryptocurrencies within their domains. It advises against a single unified regulator for digital assets and proposes resolving investor grievances under India’s Consumer Protection Act.

The RBI, on the other hand, highlighted potential fiscal risks associated with cryptocurrencies, including tax evasion and reliance on voluntary compliance.