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India’s crypto saga did not have any significant breakthrough this year. As the regulatory climate remained unclear, the country’s market regulator feels mutual fund houses should not come up with fund offers related to cryptocurrency assets.
SEBI Not Excited About Crypto NFOs
The Securities and Exchange Board of India (SEBI) chairman, Ajay Tyagi, reportedly noted that the regulatory entity does not want the domestic mutual funds to develop any crypto-based new fund offers (NFOs) until the government comes up with a digital asset bill.
The SEBI chief’s remarks on mutual fund investments related to cryptocurrency come after Invesco Mutual Fund deferred the launch of the blockchain fund due to regulatory uncertainty.
Earlier, the country’s securities regulator approved the Invesco Mutual Fund to launch its blockchain fund. It was slated to go live for subscription on November 24th. The fund would have been India’s first such offering to provide exposure to companies across the world to participate in the blockchain space.
It is important to note that the Indian government and the regulators have been supportive of blockchain tech but not cryptocurrencies.
India’s Relationship with Crypto
Not much has changed over the past years. The government was set to introduce a crypto bill that sought to prohibit “all private cryptocurrencies” this year, not once but twice, before backing out. Even during the winter session of the Parliament, crypto regulation was one of the trending topics.
Several policymakers believe that digital currencies may hurt India’s macro-economic and financial stability. India’s central bank continued to take an aggressive stance on crypto. Prime Minister Narendra Modi, on the other hand, has mostly stayed away from making hostile comments on the industry and instead highlighted the need for regulation.
During his virtual address at the Summit for Democracy, Modi said,
“We must also jointly shape global norms for emerging technologies like social media and cryptocurrencies, so that they are used to empower democracy, not to undermine it.”
Amid the uncertainty, India’s crypto market continued to explode this year. According to Chainalysis’ report from October, the market grew 641% from July 2020 to June 2021. India was also ranked second with respect to crypto adoption in August.