India’s Parliamentary Standing Committee on Finance has proposed establishing a self-regulatory organisation (SRO) to oversee virtual digital assets (VDAs), aiming to address the regulatory gap in the crypto sector. The panel suggested this interim mechanism operate under a designated regulator and called for clearer rules on tokenised securities and crypto investment products under the Securities Markets Code, 2025, according to inc42.com.
The panel highlighted that excluding VDAs from securities law has created uncertainty, as current policies focus mainly on taxation with a 30% tax on crypto gains and mandatory transaction reporting. The absence of a dedicated regulatory framework has left startups and investors navigating a compliance environment without a clear market structure. Industry executives welcomed the move, viewing it as progress beyond punitive tax measures toward better investor protection and clearer asset classification.
This proposal comes amid ongoing debates about how to regulate the diverse crypto ecosystem in India. The panel’s recommendations mark a shift from mere taxation to a structured regulatory approach, which could help distinguish between different digital asset classes. The move aligns with global trends where self-regulatory bodies help bridge gaps before comprehensive legislation is enacted, potentially fostering more confidence among market participants.
The Securities Markets Code, 2025, which includes provisions for tokenised securities and crypto products, is expected to be a key legislative framework for crypto regulation. The panel’s recommendation for an SRO aims to serve as an interim step while this code is finalized and implemented, providing clearer oversight for the crypto industry in India.