Regulation of Crypto Sector in India: Industry Calls for Multiple Agencies to Oversee Framework

Summary:
As the deadline to develop a common regulatory framework for the crypto sector approaches, homegrown crypto firms in India suggest that multiple regulatory agencies might be needed. The complexity and time required for a single regulator to oversee the entire sector and create new legislations from scratch would be challenging ahead of the 2025 timeline. The IMF-FSB has set a deadline for addressing data gaps on crypto assets by the end of 2025. The Securities and Exchange Board of India (Sebi) may recommend multiple regulators for overseeing crypto trade.
Industry experts like R Venkatesh from CoinSwitch and Rajagopal Menon from WazirX emphasize the need for the government to either create new legislation or adapt existing laws for the evolving crypto space. They welcome regulation, noting that the G20 roadmap requires crypto regulations by 2025. The Indian crypto market is projected to reach $241 million by 2030.
Experts like Sumit Gupta from CoinDCX suggest that regulation could be based on the nature of crypto activities, with different regulators for different aspects, such as Sebi for trading-like activities and RBI for monetary aspects. The Department of Consumer Affairs could handle consumer protection. Despite the RBI’s concerns about crypto’s threat to financial stability, industry players advocate for a consultative approach to formulating regulations to foster innovation and growth in the sector.