Ajay Tyagi, Chairman of the Sebi, has asked mutual fund houses not to invest in crypto assets until India has a proper crypto regulatory framework in place.
Ajay Tyagi, the chairman of the Securities and Exchange Board of India (Sebi), stated on Tuesday that the market regulator does not want mutual fund houses to get involved or invest in any crypto asset-based new fund offers (NFOs) until the Government of India passes the Crypto Regulation Bill.
There is currently no governing body for crypto investment in India, nor are there any rules or regulations in place. It’s also unclear whether crypto investments are subject to taxes.
Tyagi made the announcement following the recent incident at Invesco Mutual Fund, an asset management company (AMC). Despite Sebi approval, it postponed the launch of its blockchain fund last month due to legislative uncertainty.
The Invesco CoinShares Global Blockchain ETF Fund of Fund (FoF) was the first scheme in India to be approved by the Securities and Exchange Board of India (Sebi) to provide exposure to global companies participating in the blockchain ecosystem. The scheme was supposed to open for subscriptions on November 24th.
Recently, there have been discussions about regulating cryptocurrencies, as it was one of the topics discussed during the Parliament’s winter session. It has recently picked up steam after a parliamentary standing committee on finance met with cryptocurrency stakeholders on Monday to identify potential opportunities and challenges in crypto financing and investment. Prime Minister Narendra Modi also presided over a meeting in which he discussed the flaws in India’s unregulated crypto market.
The cryptocurrency regulation bill was supposed to be introduced during the just-concluded winter session of Parliament, but it has been put on hold for the time being because the government wants to have more discussions before introducing the bill.
Despite numerous research reports and warnings from experts highlighting the potential threats from crypto and how it may affect the economy, there has been a growing interest in this digital currency among the general public in India.
Various business moguls, including Mukesh Ambani, support the bill because they believe it will enable institutional investors in India to participate in the cryptocurrency market.