The Securities and Exchange Board of India (Sebi) chairman, Ajay Tyagi, on Tuesday said that the market regulator doesn’t want mutual fund houses to come up with crypto assets based new fund offers (NFOs) untill the government comes out with the regulations for cryptocurrencies.
While investing and trading in crypto assets is allowed in India as of now, the laws are still not clear as to how they are regulated and taxed.
Tyagi’s comments came after asset management company (AMC), Invesco Mutual Fund, last month despite Sebi’s approval delayed its blockchain fund due to legislative uncertainty.
Invesco CoinShares Global Blockchain ETF Fund of Fund (FoF) was the first scheme in India to get approval from Sebi that offers exposure to global companies participating in the blockchain ecosystem. The scheme was originally scheduled to open for subscription on 24 November.
“From the developments of the last few days, Indian lawmakers have been meeting participants in the country’s digital assets industry, which will likely culminate in a new legislative framework being formulated. In light of the above, we believe it is important for investors to fully understand all aspects before making long term investment decisions,” Invesco Mutual Fund had said in a note.
Another AMC, Navi Mutual Fund, which is part of Sachin Bansal-backed Navi Group, had also filed for a blockchain index fund of funds (FoF) with Sebi.
Tyagi’s comments technically mean that the regulator won’t be allowing any blockchain or crypto fund till the regulations are clear.
The talks around regulating cryptocurrencies have gathered pace in the recent past after a parliamentary standing committee on finance met cryptocurrency stakeholders on Monday to explore the opportunities and challenges involving crypto financing. Prime Minister Narendra Modi also had chaired a meeting, where he talked about the concerns of unregulated crypto markets.
A bill to regulate cryptocurrencies in India was slated to be introduced in the parliament in the just-concluded session. However, according to media reports, but is still not ready.
Despite the Reserve Bank of India time and again highlighting economic, financial, operational, and legal risks, crypto investors have surged manifold in the country.
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