Ajay Tyagi, Chairman of the Securities and Exchange Board of India(SEBI), urged mutual funds not to invest in crypto-related assets while the government examines new cryptocurrency rules. Tyagi advised firms not to invest in crypto-related funds until the government clarifies its policy and regulatory framework.
The SEBI chairman stated that “those who have invested in mutual fund – in companies related crypto assets or foreign firms via fund-of-funds – I think it is best for businesses to not make such investments until we get clear on its (crypto) policy.”
Although the regulatory environment in India for cryptocurrency is murky at the moment, India has seen an increase in its popularity. It is not clear if crypto investments are subject to tax obligations in India.
Tyagi’s comments come after the recent Invesco Mutual Fund event, an asset management company (AMC). Despite Sebi’s approval, it delayed its Blockchain fund last month due to legislative uncertainty.
During the recent winter session, there were discussions about cryptocurrency. After a meeting of the parliamentary standing committee for finance with crypto stakeholders, the talks gained momentum. This was to identify potential opportunities and challenges in investing and financing cryptocurrency.
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Informally, the Indian government planned to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill (2021) for discussion in the parliament’s current winter session. However, the bill is not included in the list of bills India’s lower house will be considering at the end of the winter session.
Modi, the Indian Prime Minister, has become more vocal about cryptocurrencies in 2021. Modi encouraged democratic countries to work together to reap the benefits of blockchain technology and cryptocurrencies during the Sydney Dialogue. He warned against their misuse.