Key Highlights
- India’s Parliamentary Standing Committee on Finance recommended an interim crypto regulatory framework through recognized Self-Regulatory Organizations (SROs).
- The panel urged the government to define virtual digital assets across securities, derivatives, and other financial categories.
- Lawmakers sought clarification on whether tokenized securities and crypto investment products should fall under the proposed Securities Markets Code.
India’s Parliamentary Standing Committee on Finance has recommended introducing an interim regulatory framework for cryptocurrencies and virtual digital assets (VDAs), arguing that stronger oversight is needed.
The recommendation appears in the committee’s 36th Report on the proposed Securities Markets Code, 2025, which was presented in Parliament on July 23.
Instead of bringing cryptocurrencies under the proposed securities law, lawmakers recommended establishing recognized Self-Regulatory Organisations (SROs) to operate under the supervision of a designated regulator.
The framework should include minimum standards covering governance, transparency, disclosures, investor protection, grievance redressal, compliance, and codes of conduct to reduce risks while preserving market discipline.
Why Parliament is pushing for crypto SROs
The latest recommendations conclude several months of parliamentary consultations with regulators, government agencies, and crypto industry participants.
As previously reported, the committee held multiple rounds of discussions with major crypto exchanges, including Binance, WazirX, and ZebPay, as well as representatives from the International Financial Services Centres Authority (IFSCA) and various government ministries to understand the evolving digital asset ecosystem.
In a later round of hearings, lawmakers also invited senior officials from the Reserve Bank of India (RBI) and the Institute of Chartered Accountants of India (ICAI) to provide their views on virtual digital assets, taxation, accounting standards, and financial stability concerns.
The latest report reflects those consultations, incorporating feedback from the RBI, the Income Tax Department, crypto exchanges, and other stakeholders.
Why defining digital assets matters
Beyond recommending interim oversight, the committee also urged the Ministry of Finance to establish clearer legal definitions for virtual digital assets. Lawmakers noted that not every crypto asset fits neatly into existing categories such as securities or derivatives and recommended creating separate classifications based on their characteristics.
The committee also asked the government to clarify whether:
- Crypto investment products would be covered under the proposed Securities Markets Code.
- Exchanges offering tokenized securities would fall within the legislation’s scope.
- Additional enabling provisions are required to ensure regulators can oversee tokenized financial products.
The recommendations also highlight the growing focus toward tokenized real-world assets (RWAs), an area seeing rapid adoption globally.
Government position on crypto remains unchanged
While proposing interim oversight, the committee acknowledged that the Indian government’s official stance on cryptocurrencies remains largely unchanged. According to the report, virtual digital assets are currently regulated only for limited purposes, including taxation, anti-money laundering compliance, and reporting obligations.
“The position of the Central Government regarding crypto-assets, including Virtual Digital Assets, is that such assets are presently unregulated in India, except for the limited purposes of taxation, prevention of money laundering and reporting,” the report states.
The committee also noted that any comprehensive regulatory framework would require both domestic coordination and international cooperation, given the global nature of digital assets. As a result, lawmakers concluded that including cryptocurrencies directly within the Securities Markets Code would be premature at this stage.
What these recommendations could mean for crypto
The committee’s recommendations indicate that Parliament is moving toward a more structured approach to crypto oversight. Rather than proposing an immediate standalone crypto law, lawmakers favor a phased approach that introduces industry supervision through SROs while broader policy discussions continue.
For India’s crypto industry, the recommendations do not change the current legal status of digital assets. However, they represent one of Parliament’s clearest signals that formal oversight, along with clearer rules for crypto investment products and tokenized securities, is becoming an increasingly important policy priority.
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