Sebi has made representations to government on crypto regulations: Former chief Ajay Tyagi

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The Securities and Exchange Board of India (Sebi) has made representations to the government on the regulation of cryptocurrencies in India, former chairman Ajay Tyagi said at a media briefing on March 2.

Tyagi has vacated the post of Sebi chairman after a five-year stint and is succeeded by former whole-time director Madhabi Puri Buch.

The former chairman said that starting from November, the capital market regulator was in discussion with the government and has made several representations.

The government has been working on a bill on cryptocurrencies. According to media reports, the bill may pave the way for treating cryptocurrencies as digital assets to be regulated by the capital market regulator but may ban them as a medium of exchange.

The government in the Union Budget for 2022-23 introduced taxation on ownership and investments in cryptocurrencies that led many to believe that the government is preparing the market for eventual regulation.

Finance Minister Nirmala Sitharaman announced that all virtual digital assets will be taxed at a flat rate of 30 percent on a ‘gross annual basis’ including gifts, non-fungible tokens, and cryptocurrencies.

Tyagi said that a group within the market regulator has now become well-versed in the technology and market dynamics of cryptocurrencies. Earlier, market participants in the crypto universe had raised questions over Sebi’s ability to regulate an asset like cryptocurrency.

That said, media reports had suggested that cryptocurrency exchanges were in favour of Sebi or a new regulator being handed the stewardship of the still-nascent asset class.