India's Finance Committee Proposes Self-Regulatory Organization for Temporary Crypto Market Oversight

Odaily Planet Daily News The Standing Committee on Finance of the Indian Parliament has recommended that the government establish a temporary regulatory mechanism led by a recognized self-regulatory organization 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 self-regulatory organization should implement standardized codes of conduct under the direct supervision of the Reserve Bank of India or the Securities and Exchange Board of India, covering consumer protection, platform transparency, and token disclosure standards. It would also be responsible for 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 temporary mechanism must operate under strict oversight by the central bank or securities regulator to address macroeconomic risks such as cross-border capital flows, stablecoin dollarization, tax evasion, and violations of foreign exchange management laws.