Parliamentary Panel Urges Crypto Regulation: SROs Suggested as Interim Measure
The Parliamentary Standing Committee on Finance, in its report on the Securities Market Code (SMC), has recommended a comprehensive regulatory framework for Virtual Digital Assets (VDAs), including cryptocurrencies. The committee highlighted an existing regulatory vacuum and stressed the need to mitigate risks, safeguard investor interests, and ensure market discipline.
Pending the establishment of a full legislative framework, the committee suggested that the government consider introducing an interim regulatory mechanism through recognised Self-Regulatory Organisations (SROs). These SROs would operate under the oversight of a designated regulator, providing a stopgap measure to address immediate concerns.
The call for regulation comes amidst growing interest in digital assets in India. The government has previously taken steps such as taxing virtual digital assets but has not yet enacted comprehensive legislation. The committee's report underscores the urgency of creating a structured environment to protect investors and maintain financial stability.
The recommendation aligns with global trends, where countries are grappling with how to regulate the rapidly evolving crypto space. The committee's approach—combining a long-term legislative framework with an interim SRO-based mechanism—aims to balance innovation with consumer protection.
Stakeholders, including crypto exchanges and investors, have welcomed the move as a step towards clarity. However, experts caution that the design of the SRO mechanism and the choice of regulator will be critical to its effectiveness.
