India Proposes Interim Crypto Regulation Through Industry-Led SROs

The Indian government has taken a significant step towards regulating cryptocurrencies as the Parliamentary Standing Committee on Finance recommended an interim regulatory framework for VDAs (Virtual Digital Assets) through Self-Regulatory Organisations (SROs).

The recommendation was included in the committee's 36th Report on the proposed Securities Markets Code, 2025, tabled in Parliament on July 23. The panel suggested allowing industry-led SROs to oversee the sector under the supervision of a designated regulator such as SEBI or the RBI.

The committee also asked the government to clarify how crypto investment products, tokenized securities and exchanges offering tokenized assets will be treated under future regulations. It noted that India should introduce clear legal definitions for different types of VDAs because not every crypto asset should be regulated in the same way.