The Securities and Exchange Board of India (SEBI) has suggested that multiple regulators should oversee cryptocurrency trading in the country, according to recently disclosed documents seen by Reuters. 

The documents suggest that a division within India’s financial authorities should handle the regulatory oversight. In a separate document, the Reserve Bank of India (RBI) argued that digital currencies pose a macroeconomic risk to the country.

Government officials submitted the documents to a panel tasked with advising the country’s finance ministry on policy, said Reuters.

Rather than having one unified regulator dealing with digital assets, SEBI recommended that different regulators should collectively oversee digital assets activities falling under their jurisdiction.

In this case, SEBI would monitor digital assets classified as securities and initial coin offerings (ICOs), as well as issue licenses for financial products. Meanwhile, the Reserve Bank would oversee fiat-backed stablecoins.

Crypto-related insurance would fall under the domain of the Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority (PFRDA) would regulate pension matters related to digital assets. India’s Consumer Protection Act should be applied to disputes between investors.

The country’s Reserve Bank has a more skeptical view of cryptocurrencies. According to sources familiar with the matter, the RBI supports the idea of banning stablecoins. The agency further highlighted concerns that digital assets could facilitate tax evasion and noted that decentralized peer-to-peer (P2P) transactions in cryptocurrencies depend on voluntary compliance, posing risks to fiscal stability.

The RBI also holds that cryptocurrencies may result in a loss of income from money creation for central banks.

India has been working on adjusting its regulatory framework to include digital assets. In December 2023, the country issued 15 notices of noncompliance to foreign crypto exchanges, blocking the firms’ URLs and mobile applications to local users.

At the time of this writing, KuCoin and Binance are the only exchanges able to obtain licenses from the Financial Intelligence Unit (FIU) to restart operations. The Indian government has recently called members of the G20 to join forces in regulating digital assets.

Magazine: What do crypto market makers actually do? Liquidity, or manipulation