Cryptocurrency Exchanges Prefer SEBI as the Regulator Over RBI

Cryptocurrency exchanges have told the government that they would prefer to see the Securities and Exchange Board of India (SEBI) or a new entity as the regulator of the operations of the crypto industry in India. They believe the SEBI, the capital market regulator, is a more appropriate body to oversee cryptocurrencies than the Reserve Bank of India (RBI). 

The cryptocurrency exchanges believe that the crypto assets resemble commodities compared to currencies. Hence, it would make SEBI an ideal regulator as the body is overseeing capital markets in the country. The cryptocurrency exchanges also suggested a new entity for this purpose, and it could be a hybrid body under both RBI and SEBI. 

The RBI has warned people numerous times about the risk of investing in cryptocurrencies and asked people to be cautious with their investment decisions. In fact, it took the extreme step of banning cryptocurrencies in 2018, which the Supreme Court of India later undid. 

Cryptocurrencies have been volatile over the last few days due to various reasons and have not gone down well with the central bank. As per some reports, the banks have been informally communicated by the RBI to stop carrying out business activities with entities involved in the cryptocurrency industry. 

This development has set panic among investors as they are unable to make transactions. They are neither able to invest nor withdraw. Some cryptocurrency exchanges have been forced to stop accepting deposits denominated in rupees. Times like these make investing in cryptocurrency a risky affair and call for a regulatory body. 

Dogecoin and Bitcoin have witnessed significant gains over the year. Bitcoin has seen a yield of over 95% from the start of the calendar year, while Dogecoin has yielded more than 8,000% over a single year. However, they have also experienced steep falls. These developments led to trading platforms crashing at times. 

For any clarifications/feedback on the topic, please contact the writer at vineeth.nc@cleartax.in

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