On Tuesday, Ajay Tyagi, the chairman of the Securities and Exchange Board of India (Sebi), stated that the market regulator does not want mutual fund institutions to provide crypto assets-based new fund offerings (NFOs) until the government issues cryptocurrency legislation.
While investing and dealing in crypto assets is permitted in India, the regulations governing their regulation and taxation remain unclear.
Tyagi’s views come after asset management company (AMC), Invesco Mutual Fund, postponed its blockchain fund last month despite Sebi’s permission owing to legislative uncertainty.
With cryptocurrencies becoming increasingly popular and more mainstream in India, the government is working to regulate them.
India is a huge market for crypto and Regulations. It’s also one of the countries which has been very open in embracing blockchain technology.
The Indian government has taken a firm stance on regulating cryptocurrencies. They are not interested in regulating them for just one use case like financial transactions or payments. Instead, they want to regulate the crypto exchanges and other crypto related forms of activities that threaten the security of the digital economy.
As a result, they have proposed three possible frameworks for regulating cryptocurrency trading in India. These frameworks are: a) A complete ban on cryptocurrency trading; b) An outright ban on decentralized virtual currencies which could include Bitcoin; or c) A legal framework regulated by India’s central bank which would require users to provide KYC information when depositing cryptocurrencies into their accounts.