India panel recommends interim crypto oversight through SROs

India’s Parliamentary Standing Committee on Finance has recommended an interim regulatory framework for cryptocurrencies and virtual digital assets through recognized Self-Regulatory Organisations operating under the supervision of a statutory regulator such as SEBI or the Reserve Bank of India, rather than bringing the sector directly into the proposed Securities Markets Code, 2025. In its 36th Report tabled in Parliament on July 23, the panel called for minimum standards on governance, transparency, disclosures, investor protection, grievance redressal, compliance and codes of conduct, and urged the Ministry of Finance to create clearer legal definitions for different categories of digital assets. It also asked whether crypto investment products, exchanges offering tokenized securities and other tokenized financial products including real-world assets should fall within the future securities framework. The recommendations followed consultations with crypto exchanges including Binance, WazirX, ZebPay, CoinDCX, CoinSwitch and Coinbase, as well as the IFSCA, RBI, ICAI, FIU, CBDT and several ministries. The report recorded that the government’s formal position remains that crypto-assets and virtual digital assets are unregulated in India except for taxation, anti-money laundering and reporting purposes, while the RBI argued against granting them legal status and favored ring-fencing the formal financial system from private crypto and privately issued stablecoins. The committee nevertheless said India should move in stages instead of waiting for a single comprehensive law, as lawmakers weigh how to address offshore trading, tokenization and the country’s large crypto user base under the existing tax regime.