- India’s Parliament recommends crypto Self-Regulatory Organisations as an interim regulatory solution.
- The committee wants clear legal definitions for different categories of Virtual Digital Assets.
- The proposal could improve regulatory certainty while comprehensive crypto legislation is developed.
India is taking another step toward building a regulatory framework for cryptocurrencies, with lawmakers recommending a temporary oversight model while the government prepares comprehensive crypto legislation. The proposal, included in the Parliamentary Standing Committee on Finance’s 36th Report on the proposed Securities Markets Code, 2025, suggests using Self-Regulatory Organisations (SROs) to oversee the digital asset industry under the supervision of financial regulators.
Rather than immediately placing cryptocurrencies under the new securities law, the committee believes a phased approach would better address the fast-changing nature of the crypto market. The report was presented in Parliament on July 23 and reflects months of discussions with regulators, industry participants, and policymakers.
SROs Proposed as a Bridge to Full Crypto Regulation
The committee recommended allowing recognized Self-Regulatory Organisations to establish governance standards for the crypto industry while a broader legal framework is being developed. These organizations would operate under the oversight of regulators such as the Securities and Exchange Board of India (SEBI) or the Reserve Bank of India (RBI).
Under this model, SROs could develop best practices for transparency, investor protection, operational standards, disclosures, and grievance redressal. The approach aims to introduce accountability without delaying regulatory progress until a comprehensive crypto law is finalized.
Lawmakers believe this interim framework could help reduce uncertainty for crypto businesses while strengthening consumer safeguards.
Committee Calls for Clear Classification of Digital Assets
A key recommendation in the report is the creation of clear legal definitions for Virtual Digital Assets (VDAs). The committee emphasized that cryptocurrencies should not be treated as a single asset class.
Instead, regulators should distinguish between digital assets that function as securities, derivatives, or those requiring an entirely separate regulatory category. The report also urged the government to clarify how crypto investment products, tokenized securities, and exchanges offering tokenized assets would be regulated in the future.
Currently, cryptocurrencies in India remain largely unregulated outside of taxation, anti-money laundering compliance, and mandatory reporting obligations.
Global Regulatory Models Influence India’s Approach
Before reaching its recommendations, the committee consulted several government agencies, including the RBI, the Income Tax Department, and the International Financial Services Centres Authority (IFSCA). It also sought input from crypto exchanges and industry representatives.
The panel reviewed regulatory frameworks in the United Kingdom, Singapore, the United States, and the European Union before concluding that a phased regulatory strategy would be more practical than waiting for a single comprehensive law.
If the government adopts the recommendations, the crypto sector could gain greater regulatory clarity while lawmakers continue drafting permanent legislation. Industry participants would benefit from clearer compliance expectations, while investors could see stronger protections through standardized governance and disclosure requirements.
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Although the proposal does not immediately change India’s legal treatment of cryptocurrencies, it signals a shift toward structured oversight rather than regulatory uncertainty. For crypto exchanges, blockchain firms, and tokenized asset platforms, the recommendations may represent an important step toward a more predictable operating environment.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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