India’s Parliamentary Standing Committee on Finance has recommended an interim regulatory framework for cryptocurrencies through Self-Regulatory Organisations (SROs) while the government works on a comprehensive crypto law. The recommendation was included in the committee’s 36th Report on the proposed Securities Markets Code, 2025, tabled in Parliament on July 23.
Instead of immediately bringing cryptocurrencies under the proposed securities law, the panel suggested allowing industry-led SROs to oversee the sector under the supervision of a designated regulator such as SEBI or the RBI.
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Virtual Digital Assets Need Clear Legal Definitions
The committee said India should introduce clear legal definitions for different types of Virtual Digital Assets (VDAs) because not every crypto asset should be regulated in the same way. It noted that some digital assets may qualify as securities, others as derivatives, while some may require a separate regulatory category.
The panel also asked the government to clarify how crypto investment products, tokenized securities and exchanges offering tokenized assets will be treated under future regulations.
“The position of the Central Government regarding crypto-assets, including Virtual Digital Assets, is that such assets are presently unregulated in India, except for the limited purposes of taxation, prevention of money laundering and reporting requirements,” the report said.
Why India Is Proposing Crypto SROs
The recommendation follows months of consultations with stakeholders, including the Reserve Bank of India (RBI), the Income Tax Department, the International Financial Services Centres Authority (IFSCA), crypto exchanges and industry representatives.
The committee also studied regulatory approaches in the United Kingdom, Singapore, the United States and the European Union before concluding that India should adopt a phased regulatory framework instead of waiting for a comprehensive law.
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Why the Proposal Matters for India’s Crypto Industry
The recommendation signals that policymakers are moving toward regulated oversight rather than leaving the crypto sector in a legal grey area. If adopted, recognized SROs would be responsible for setting standards for governance, transparency, disclosures, investor protection and grievance redressal while operating under regulatory supervision.
The proposal could also provide greater regulatory certainty for crypto exchanges and companies developing tokenized financial products.
