India's Crypto Regulation Plan Sparks Debate on Broader Policy Consultation

The Parliamentary Standing Committee on Finance has recommended that any move to regulate cryptocurrencies and other virtual digital assets under the proposed Securities Markets Code should be preceded by wider policy deliberations and coordination among regulators and government departments.

The committee examined the Securities Markets Code, 2025, which is designed as a technology-neutral framework allowing tokenized versions of existing securities such as shares, bonds, and units of investment schemes to remain within the ambit of securities regulation.

However, the panel observed that cryptocurrencies without the characteristics of securities or derivatives may remain outside the proposed law. The Ministry of Finance stated that virtual digital assets like cryptocurrencies do not fall under the definitions of 'security' or 'derivative' and would therefore be exempt from the Securities Markets Code.