RBI and SEBI Collaboration Signals Major Shift in India’s Cryptocurrency Policy by 2024

• India’s financial regulators are working closely to shape a new cryptocurrency policy, with significant steps taken towards a detailed discussion paper expected in Q3 2024.
• The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have joined forces in this endeavor, indicating a collaborative regulatory approach.
• This initiative highlights a potential shift from earlier restrictive views to more inclusive cryptocurrency regulations.

India’s financial regulators are converging on a comprehensive crypto policy, signaling a transformative phase in India’s cryptocurrency landscape.

India Crypto Policy Development: Regulatory Bodies Collaborate

India’s journey towards a structured cryptocurrency policy has seen a significant milestone with the collaboration between the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). This inter-ministerial group is dedicated to formulating an encompassing policy framework. Expected to release a discussion paper by Q3 2024, this move could redefine India’s regulatory stance on digital assets.

Discussion Paper Expected by September 2024

The forthcoming discussion paper aims to incorporate feedback from various stakeholders to shape effective and balanced cryptocurrency regulations. Economic Affairs Secretary Ajay Seth shared that the current regulatory measures focus primarily on anti-money laundering (AML) and counter-terror financing (CTF) protocols, which were extended to cryptocurrencies in March 2023. This new paper is set to address broader regulatory issues and propose more comprehensive guidelines.

Balancing Diverse Regulatory Perspectives

During India’s G20 presidency in 2023, members acknowledged the recommendations from the International Monetary Fund (IMF) and the Financial Stability Board (FSB). The discussion paper, aligned with these global standards, will explore the proper regulatory scope while considering the diverging views of Indian authorities. SEBI appears open to regulated private virtual asset trading, while the RBI remains cautious about potential macroeconomic implications.

Conclusion

India’s collaborative approach in developing a robust cryptocurrency policy marks a crucial step forward. By addressing the perspectives and concerns of different regulatory bodies, the upcoming discussion paper promises to offer a more inclusive regulatory framework. This initiative could well define the future of cryptocurrency regulation in India, paving the way for a balanced and well-regulated digital asset ecosystem.