The finance ministry, the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) are working to deliver digital gold, together with crypto property, under some regulatory oversight, as concerns mount over the unchecked growth in such investments without investor protections that apply to regulated securities.
The proposal to regulate the assets comes after Sebi in September and October barred registered brokers and investment advisers from offering digital gold and other unregulated investment products. The regulator said offering such products was a violation of the Sebi Act and, as a consequence, could lead to monetary penalties and, in some cases, licence cancellations.
Some fintech firms selling digital gold had to stop such sales even as others sell off the digital gold offering to their unregulated parent entities.
As part of the plan, the government may amend the SEBI Act and Securities Contracts Regulation Act to categorise digital gold as a security.
Prime Minister Narendra Modi recently chaired a meeting with regulators on deciding a long-term strategy for crypto assets. This followed the standing committee on finance holding a meeting with stakeholders to ascertain their views on ‘opportunities and challenges associated with crypto finance’.
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