The chief of India’s market regulator advised mutual fund firms to avoid investing in crypto assets until the country frames rules on digital tokens even as asset managers have started seeking approval for schemes with exposure to the blockchain ecosystem.
The call for caution by Ajay Tyagi, chairman of the Securities and Exchange Board of India, comes as India deferred a legislation on regulation of cryptocurrencies to hold wider consultations. The bill was expected to be tabled in the recent winter session of parliament.
Tyagi’s response, while speaking at a press conference on Tuesday to announce changes in regulations for initial public offering disclosures, was measured compared with the concerns flagged by the nation’s banking regulator. Reserve Bank of India Governor Shaktikanta Das recently said cryptocurrencies have serious concerns “from the point of view of macroeconomic stability and financial stability.”
India, which initially planned to ban digital tokens, is now working to regulate them. The bill’s agenda is to prohibit all private cryptocurrencies in India, but allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.
SEBI earlier granted approval to a blockchain-related scheme from Invesco. The fund, however, deferred the launch of Invesco CoinShares Global Blockchain ETF Fund of Fund—the country’s first scheme to give investors exposure to companies in the blockchain ecosystem—citing emerging legislative framework.
Navi Blockchain Index Fund of Funds, which aims to offer exposure to Indxx Blockchain Index, is awaiting approval from SEBI.