India's SEBI Proposes Multi-Authority Oversight for Cryptocurrency Amidst RBI's Call for Stablecoin Ban

India's market regulator has proposed that the oversight of cryptocurrency trading be distributed among various authorities. The Securities and Exchange Board of India (SEBI) made this recommendation to a government panel responsible for developing policy recommendations for the finance ministry, according to documents cited by Reuters. The panel is expected to submit its report by June.

SEBI's stance contrasts with that of the Reserve Bank of India (RBI), which remains in favor of banning stablecoins, according to a source familiar with the panel's discussions. The RBI views cryptocurrencies as a threat to policy sovereignty.

The report indicates that SEBI suggested it could oversee cryptocurrencies classified as securities and initial coin offerings (ICOs); the RBI could regulate stablecoins backed by fiat currencies; and the Insurance Regulatory and Development Authority of India (IRDAI), along with the Pension Fund Regulatory and Development Authority (PFRDA), could supervise insurance and pension-related virtual assets.

Investor grievances related to cryptocurrencies should be addressed under India's Consumer Protection Act, according to the report.

India is currently holding national elections, with results expected on June 4. In December, Jayant Sinha, chair of the parliament's Standing Committee on Finance, stated that the country is unlikely to introduce specific legislation for crypto or Web3 before mid-2025.

India's crypto policy has been managed primarily by the Finance Ministry, which has neither confirmed the legality of crypto nor refrained from imposing heavy taxes on the industry.

However, there are signs of a potential shift in the perception of crypto. Last year, the Finance Ministry led an initiative to build a global consensus on crypto regulation during India's G20 presidency. An official later indicated that India would soon decide its own stance on crypto. Additionally, the recent registration of over 46 crypto-related firms with the nation's financial intelligence unit suggests a growing credibility for the sector, despite the question of legitimacy still resting with policymakers.