India Proposes Interim Crypto Regulation through Industry-Run SROs

India's parliamentary committee has proposed an interim solution to regulate its growing cryptocurrency market. The panel recommends allowing Self-Regulatory Organizations (SROs) to police the market under the supervision of either the Reserve Bank of India (RBI) or Securities and Exchange Board of India (SEBI). This move is aimed at protecting the 39 million people who trade digital assets without any regulation.

The SROs would be responsible for enforcing conduct standards, auditing exchange reserves, separating customer money from company balance sheets, and managing complaints. The committee observed similar systems in operation in the UK, Singapore, the US, and EU before arriving at this idea.

The absence of legislation has driven many crypto traders to foreign exchanges, with around 73% of India's crypto volume now taking place on overseas platforms. Critics argue that prohibition is not protection, and regulation is key to safeguarding investors.