India’s crypto saga didn’t see any breakthroughs this year. The regulatory environment in India remains unclear. Therefore, the country’s regulator believes that mutual fund houses shouldn’t offer funds related to cryptocurrency assets.
SEBI not excited about Crypto NFOs
Ajay Tyagi (chair of the Securities and Exchange Board of India) stated that the regulator does not want domestic mutual funds to create any crypto-based new offer (NFOs), until the government has drafted a digital asset bill.
After Invesco Mutual Fund delayed the launch of the cryptocurrency fund, the SEBI chief has made remarks about mutual fund investments in relation to cryptocurrency.
The country’s securities regulator had approved Invesco Mutual Fund for its launch of its blockchain fund earlier. The fund was scheduled to be available for subscription on November 24, 2018. This fund would have been India’s first offering of this nature to allow companies around the globe to get exposure in the blockchain space.
Important to remember that while the Indian regulators and government have supported blockchain tech, they are not supportive of cryptocurrencies.
India’s Relationship to Crypto
In the last few years, not much has changed. Before the government pulled out, it was set to introduce a bill to ban “all private cryptocurrency” in this year’s parliament. Crypto regulation was a hot topic even during the winter session.
Many policymakers think that India’s financial and macro-economic stability may be affected by digital currencies. India’s central bank has continued to be aggressive in its position on crypto. Prime Minister Narendra Modi has, however, largely resisted making any hostile comments about the industry and instead emphasized the need for regulation.
Modi stated, during his virtual address to the Summit for Democracy.
“We must also work together to shape global norms regarding emerging technologies such as social media and cryptocurrency, so they can be used to empower democracy, rather than to undermine it.”
Despite all the uncertainty, India’s cryptocurrency market has continued to boom this year. Chainalysis’ October report shows that the market has grown 641% between July 2020 and June 2021. In August, India was ranked second in terms of crypto adoption.
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