Parliamentary Committee Calls for Virtual Digital Asset Regulation

India's Parliamentary Standing Committee on Finance has called for a comprehensive regulatory framework for Virtual Digital Assets (VDAs), including cryptocurrencies. The committee's recommendation aims to address the rapid growth of the VDA ecosystem and the associated risks, such as financial instability, money laundering, and investor protection concerns. The committee suggests establishing an interim Self-Regulatory Organisation (SRO) under the oversight of the Reserve Bank of India (RBI) or the Securities and Exchange Board of India (SEBI) until a dedicated law is enacted. This interim measure seeks to mitigate risks related to money laundering and tax evasion, emphasizing the importance of regulating these assets as a matter of national security for India. The committee also highlights the need for broader policy consultations before integrating cryptocurrencies into the Securities Markets Code framework. The RBI has previously expressed concerns about the potential threats posed by VDAs to India's economy, citing issues such as money laundering and financial instability. The committee's recommendations reflect a growing recognition of the need for a structured approach to managing the VDA sector in India.