India’s Finance Committee proposes to establish a temporary self-regulatory framework for cryptocurrency regulation

PANews July 24, according to FinanceFeeds, India’s Parliamentary Standing Committee on Finance has recommended that the government establish a temporary regulatory mechanism led by an approved self-regulatory organization (SRO) to oversee the domestic cryptocurrency and virtual digital asset markets. The committee warned that the lack of a clear legal framework exposes millions of retail investors to operational, custody, and fraud risks. The SRO will operate under direct supervision of the Reserve Bank of India or the Securities and Exchange Board of India, implementing standardized codes of conduct covering consumer protection, platform transparency, and token disclosure standards. It will also be responsible for auditing exchange reserves, enforcing the segregation of customer funds from corporate funds, and setting up user complaint-handling channels. The committee emphasized that the temporary SRO must operate under strict oversight by the central bank or the securities regulator to address macroeconomic risks such as cross-border capital flows, stablecoin dollarization, tax evasion, and violations of foreign exchange management laws.