Last month, Invesco Mutual Fund suspended the launch of its blockchain fund in India

Government expected to table cryptocurrency bill during current winter session of parliament

Bill should recognize cryptocurrencies as an asset class and ban their use as currency

Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi has said that mutual funds cannot invest in crypto-related products until the government introduces its draft law. cryptocurrency and that industry regulations will not be clear.

Tyagi made the statement during the press conference after the SEBI board meeting.

At its board meeting, the capital market regulator approved several changes to the standards for mutual funds and initial public offerings (IPOs), including the extension of the blocking period by 50% anchor investments in IPOs.

SEBI chief commentary on crypto-linked MF investments comes after Invesco Mutual Fund put india launch of its blockchain fund on hold amid regulatory uncertainty. The fund company had planned to launch the Invesco India fund of funds – Invesco CoinShares Global Blockchain ETF on November 24.

Although concerns have been raised about regulations on blockchain-based cryptocurrencies, the government and authorities, including the Reserve Bank of India (RBI), have so far appeared to favor blockchain as a technology.

Earlier this month, Navi Mutual Fund, headed by Sachin Bansal, submitted draft documents to SEBI to launch its blockchain index fund of funds (FoF).

The Navi Blockchain Index FoF would be an open-ended fund of funds that invests in units of overseas exchange-traded funds or index funds based on the Indxx Blockchain index.

Crypto stakeholders expect clarity

The government had listed the Cryptocurrency and Official Digital Currency Bill Regulation, 2021, for presentation to parliament during its current winter session. However, few media reports said the bill is unlikely to be introduced in the current session.

Earlier this month, the Minister of Finance Nirmala Sitharaman said a “well-consulted” bill is in the process of being passed and will be tabled in parliament once cabinet approves it.

At the recent board meeting, the Reserve Bank of India, the central bank members, raised concerns about private cryptocurrencies.

The bill also seeks to create a framework to facilitate the launch of the official digital currency to be issued by the RBI.

Concerns and apprehensions have circled around a likely ban on all cryptocurrencies and investments in them. According to several reports, a penalty of INR 20 Cr or a prison term of 1.5 years will be imposed, in case someone is found in violation of the standards. The government should recognize cryptocurrencies as a asset class and prohibit their use as currency.

Speaking at the Hindustan Times Leadership Summit on December 4, 2021, Finance Minister Sitharaman said there was a a lot of speculation happens in the material which is not healthy at all.

The lack of regulatory clarity has left stakeholders, including investors and trading platforms, in a state of confusion. India has the highest number of crypto owners among any country in the world – over 100 million, according to BrokerSelector.

Investment in cryptocurrencies has grown from nearly $ 923 million in April last year to $ 6.6 billion in May this year in the country.


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