India Proposes Interim Regulatory Framework for Virtual Digital Assets

India's regulatory landscape for virtual digital assets (VDAs) is moving towards greater clarity, according to a recent report from the Parliamentary Standing Committee on Finance. The committee has proposed an interim regulatory structure for the VDA sector until a dedicated law is introduced. This framework would be established through recognized self-regulatory organizations (SROs), which would then be supervised by a designated regulator.

The report also recommends introducing clearer legal classifications for VDAs, recognizing that different digital assets may have characteristics similar to securities, derivatives, or other asset classes. Additionally, it suggests clarifying the regulatory treatment of crypto investment products and tokenized securities under the suggested Securities Markets Code.

While these recommendations are advisory and require government approval before any policy changes take effect, they indicate a growing emphasis on developing a structured regulatory framework for the VDA sector. This approach balances innovation with necessary regulatory oversight, paving the way for greater clarity around the regulation of crypto exchanges, tokenised assets, and digital investment products.