India's Finance Committee Proposes Self-Regulatory Body for Interim Crypto Market Oversight

Odaily Planet Daily News The Parliamentary Standing Committee on Finance of India has recommended that the government establish an interim regulatory mechanism led by a recognized Self-Regulatory Organization (SRO) to oversee the domestic cryptocurrency and virtual digital asset market. The committee warned that the lack of a clear legal framework exposes millions of retail investors to operational, custodial, and fraud risks. The committee suggested that this SRO should implement standardized codes of conduct—covering consumer protection, platform transparency, and token disclosure standards—under the direct supervision of the Reserve Bank of India (RBI) or the Securities and Exchange Board of India (SEBI). Its responsibilities should also include auditing exchange reserves, mandating the segregation of client funds from corporate funds, and establishing channels for handling user complaints. The committee further emphasized that this interim mechanism must operate under the strict oversight of the central bank or the securities regulator to address macroeconomic risks such as cross-border capital flows, stablecoin dollarization, tax evasion, and violations of foreign exchange management laws.