- SEBI said the decentralized nature of cryptocurrencies poses a major challenge in enacting regulatory laws for digital assets.
- The market regulator said crypto transactions need to be under the purview of the law for checks of AML and terrorism financing.
- SEBI and the Reserve Bank of India (RBI) are the prominent regulators of financial activities in India.
The Securities and Exchange Board of India (SEBI), one of the bodies that regulate the financial markets in India, expressed its concerns about consumer protection and the enforcement of a regulatory framework for cryptocurrency.
It said the decentralized nature of cryptocurrencies poses a major challenge towards enacting regulatory laws for digital assets.
SEBI made the statements while speaking to the Parliamentary Standing Committee on Finance on Monday, June 6. It, nonetheless, stressed the need for crypto transactions to be under the purview of the law, that such unchecked transactions may be an avenue for money laundering and terrorism financing.
A digital currency acts as a bridge between the fiat currency of the foreign jurisdiction and the Indian rupee. One objective of bringing crypto trading platforms under regulatory purview could be to provide AML /CFT / KYC reporting; the same can be ensured by registration of the entities as money changers, authorized dealers, or forex dealers.
The subject of crypto regulations in India has been a matter of debate for a while, though no proposition for a ban on cryptocurrency trading yet. In fact, according to a newly enforced law, crypto investors are to pay a 30% tax on profits made from cryptocurrencies, including NFT sales and mining rewards.
In other news, the Reserve Bank of India (RBI) said in an annual report last month that they are accessing the pros and cons of the introduction of central bank digital currency (CBDC).
CBDC is will be an alternative to cryptocurrency, which will act as legal tender with all the characteristics of the fiat currency.
The SEBI and the Reserve Bank of India (RBI) are the prominent regulators of financial activities in India.