- SEBI Chairman Ajay Tyagi has urged mutual fund companies not to invest in cryptocurrencies following a government proposal to regulate the sector.
- Despite the absence of a formal regulatory framework, cryptocurrency is already gaining popularity in India
- Additionally, Indian Prime Minister Modi will increasingly speak out on cryptocurrencies in 2021.
Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi has urged mutual funds to avoid investing in assets related to cryptocurrencies as the government considers new crypto regulations. Speaking at a press conference on Tuesday, Tyagi advised firms to refrain from investing in funds related to cryptocurrency assets until there is clarity about the policy and regulatory framework.
“Those who have invested in mutual funds – in companies related to cryptocurrency assets, or foreign firms through a fund of funds (FOF) – I believe that until we clarify its (cryptocurrency) policy, enterprises should not make that kind of investment. “, – said the chairman of SEBI.
Indian regulators have not yet established a regulatory framework for cryptocurrency, however, India is already experiencing its exponential growth in popularity. It is also unclear if the cryptocurrency investment is related to any tax liabilities in the country.
Tyagi’s remarks follow a recent event involving asset management firm (AMC) Invesco Mutual Fund. Despite Sebi’s approval, it postponed the creation of a blockchain fund last month due to legislative uncertainty.
Recently, it was reported that cryptocurrency would be discussed during the winter session of parliament. Negotiations gained further momentum following the meeting of the Parliamentary Standing Committee on Finance with cryptocurrency stakeholders to identify possible opportunities and challenges when it comes to funding and investing in cryptocurrency.
The Indian government has officially planned to submit the cryptocurrency and official digital currency regulation bill of 2021 for parliamentary debate at its current winter session. However, the bill does not appear among the bills that the lower house of India will consider at the end of the winter session.
In the meantime, Indian Prime Minister Modi is increasingly advocating cryptocurrency in 2021. During the recent Sydney Dialogue, Modi urged democracies to cooperate to make the most of cryptocurrencies and blockchain technology. He also warned against their malicious use.