SEBI considers regulatory role in crypto trading, diverging from RBI's approach. Here's what experts think

Reacting to this development, Edul Patel, CEO of , expressed optimism, stating, "SEBI's proposal for multiple regulators to oversee the Virtual Digital Assets (VDAs) sector represents a balanced and pragmatic approach. This move can ensure comprehensive oversight by leveraging the expertise of various , thereby enhancing regulatory clarity. It is a progressive stance that acknowledges the multifaceted nature of VDAs. Moreover, it can help in building , as a well-regulated environment reduces the likelihood of and enhances the overall integrity of the ecosystem."

Similarly, Ashish Singhal, Co-founder of , shared his views, highlighting SEBI's potential role in fostering a conducive for crypto. He said, "Encouraging views on crypto from the Securities and Exchange Board of India (), which has overseen India’s thriving stock markets. An enabling regulatory environment has paved the way for greater consumer adoption in several other sectors in the past, such as telecom, information technology, e-commerce, etc. This is a start, and many nuances will need to be discussed. Nonetheless, great news for crypto in India.”

SEBI's approach mirrors that of regulatory frameworks in countries like the United States, where oversight extends to crypto assets categorized as securities, as well as emerging offerings such as Initial Coin Offerings (ICOs).

RBI's concerns
In its submissions, the RBI said cryptocurrencies could lead to tax evasion and that decentralised peer-to-peer (P2P) activities in cryptocurrencies would rely on voluntary compliance - both representing risks to fiscal stability.

It also said cryptocurrencies may lead to loss of "seigniorage" income, which is the profit earned by a central bank from money creation.

After the 's 2018 orders were challenged by the industry and struck down by the , the central bank asked financial institutions to strictly comply with tough money laundering and foreign exchange rules, effectively keeping cryptocurrencies out of India's formal financial system.

Even so, trade flourished and in 2022 the government introduced a tax on crypto transactions in India to discourage such trading. It followed that up by asking all exchanges to register locally before facilitating crypto transactions from within the country.

According to a PwC report in December, 31 countries have regulations in place that allow for trade in cryptocurrencies.

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Source: Forex-Markets-Economic Times