According to FinnceFeeds, the Standing Committee on Finance of the Indian Parliament has recommended that the government establish a temporary regulatory mechanism led by self regulatory organizations (SROs) to oversee the domestic cryptocurrency and virtual digital asset markets. The committee pointed out that the lack of a clear legal framework poses operational, custodial, and fraud risks to retail investors. SRO will implement codes of conduct under the direct supervision of the Reserve Bank of India or the Securities and Exchange Commission of India, covering consumer protection, platform transparency, token disclosure standards, auditing exchange reserves, segregating customer funds from corporate funds, and establishing complaint channels. Temporary SROs need to operate under the supervision of the central bank or the China Securities Regulatory Commission to address macroeconomic risks such as cross-border capital flows, stablecoin dollarization, tax evasion, and violations of foreign exchange management laws.
