India Panel Proposes SRO-Led Crypto Watchdog Weeks After RBI Warning

India’s Parliamentary Standing Committee on Finance has proposed for a Self-Regulatory Organisation (SRO) to oversee cryptocurrencies and virtual digital assets (VDAs) industry as an interim measure. The committee’s proposal comes weeks after the Reserve Bank of India (RBI) reiterated its concerns over cryptocurrencies before the same parliamentary panel.

India Committee Proposes SRO-Led Framework for Crypto Assets

On July 23, 2026, India’s Parliamentary Finance Committee submitted Report No. 36, recommending a transitional regulatory framework for crypto and VDAs. The committee proposed establishing a recognised SRO to oversee the industry until a comprehensive legal framework is enacted.

This SRO would operate under the supervision of either RBI or the Securities and Exchange Board of India (SEBI). It would focus on safety of the investors, governance standards, transparency, disclosure requirements, compliance, segregation of customer funds and mechanisms for addressing complaints.

How India’s Crypto Regulatory Gap Leaves Investors Exposed

The recommendations come weeks after the RBI reiterated concerns over crypto assets, citing risks to financial stability, monetary sovereignty, money laundering, terror financing, and tax evasion. India imposes a 30% tax rate on cryptocurrencies with a 1% TDS and mandates AML compliance, but the industry still lacks a dedicated statutory framework.

Despite this regulatory uncertainty, India’s crypto market has expanded rapidly, with estimates ranging from approximately 39 million KYC verified investors holding around ₹20,437 crore ($2.4 billion) in assets as of mid 2026 to over 119 million owners.

In addition, these vulnerabilities are highlighted by recent enforcement actions. In July 2026, the Enforcement Directorate investigated a ₹337 crore crypto scam that involved alleged “Key Opinion Leaders” accused of misleading investors with discounted token schemes. These cases reinforce the committee’s push for an interim SRO-led framework to strengthen investor protection until comprehensive crypto legislation is enacted.

What’s Next for India’s Crypto Assets Regulation?

The committee further recommended the government consider the necessity of a separate statutory framework for cryptocurrencies, non-fungible tokens (NFTs) and decentralised finance (DeFi) tokens. It stressed that future securities laws should remain technology-neutral to ensure tokenised securities on distributed ledger or blockchain technology fall within regulatory scope without creating loopholes.

The panel also urged for greater transparency in the legal definitions of VDAs and whether tokenized securities issued by cryptocurrency exchanges and crypto investment products would fall under the proposed Securities Market Code.

In the near term, the Finance Ministry, RBI, SEBI, and FIU IND are expected to evaluate the recommendations and consider an SRO led framework through regulatory guidance. If adopted, the proposals could strengthen crypto regulation in India, enhance investor confidence, support tokenization, and lay the groundwork for comprehensive digital asset legislation through 2026 and 2027.