India’s Regulatory Tug-of-War: Shared Crypto Oversight Proposed Amid Push for Stablecoin Ban

<div>
    <p>The Securities and Exchange Board of India (SEBI) has advocated for a dispersed regulatory framework for cryptocurrency trading, according to Reuters.</p>
</div>

<div>
    <p>The proposal was directed to a "government committee" tasked with formulating policy suggestions for the Finance Ministry, according to Reuters, citing documentation. The committee's report is expected to be submitted by June.</p>
</div>

<div>
    <p>SEBI's recommendation contrasts with the Reserve Bank of India (RBI), which continues to support a ban on stablecoins, insiders familiar with the panel's discussions mentioned. The RBI has consistently emphasized its view that cryptocurrencies pose a significant threat to the country's monetary policy sovereignty.</p>
</div>

<div>
    <p>The report mentioned that SEBI could oversee cryptocurrencies identified as securities and monitor initial coin offerings (ICOs); the RBI could regulate stablecoins backed by fiat currencies; while the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA) could oversee insurance and pension-related digital assets, respectively.</p>
</div>

<div>
    <p>Investor disputes related to cryptocurrencies should be addressed under India's Consumer Protection Act, the report indicated.</p>
</div>

<div>
    <p>India is currently in the midst of national elections, with results expected on June 4. Jayant Sinha, the chairperson of Parliament's Standing Committee on Finance, noted in December that it is improbable for the country to pass crypto-specific legislation or Web3-related bills before mid-2025.</p>
</div>

<div>
    <p>To date, India's crypto policy has largely been dictated by the Finance Ministry, which has withheld a clear stance on the legality of cryptocurrencies while imposing stringent taxes on the sector.</p>
</div>

<div>
    <p>However, there have been emerging signals of a shift in official attitudes towards cryptocurrency legitimacy.</p>
</div>

<div>
    <p>Last year, under India’s leadership as G20 president, the Finance Ministry pushed for a global consensus on crypto regulations. An official later stated that India would evaluate and finalize its own stance on cryptocurrency in the near future. Recently, another ministry official noted that the registration of over 46 crypto-related firms with the nation’s financial intelligence unit signifies a growing credibility shift, even though ultimate legitimacy remains within the policymakers' domain.</p>
</div>

<div>
    <p>SEBI, the RBI, the Finance Ministry, IRDAI, and PFRDA did not respond to requests for comment on this matter.</p>
</div>