India suggests mutual funds to avoid crypto investment until clear regulations

The Securities and Exchange Board of India or SEBI, India’s top national security regulator, has warned mutual funds against crypto investment until clear regulations are issued.

Ajay Tyagi, the chairman of the SEBI group, addressed the topic during a press conference, saying it wouldn’t be ideal for mutual funds to put public money in crypto without the government’s legal framework. Because mutual funds are one of the most popular types of investing for the number of Indian families, they must exclude crypto assets if they seek NFO (new fund offer) permission from the regulator.

Despite the lack of laws, crypto investments are not prohibited in India. Individuals and businesses can invest in and trade crypto assets. SEBI, on the other hand, believes that because there is no clarity on tax brackets and no clear indication from the government, companies should avoid offering crypto-themed investment alternatives.

Invesco Mutual Fund is the first asset management business in India to receive SEBI clearance to launch the Invesco CoinShares Global Blockchain ETF Fund of Funds, a blockchain fund. The fund offered exposure to worldwide crypto and blockchain startups, but due to regulatory uncertainties, its launch was postponed even after approval.

The Reserve Bank of India is resolute on a ban

Despite being mentioned as one of the agenda items at the start of the session, the much-anticipated cryptocurrency law did not make it to the Indian parliament’s winter session. This was the second time in 2021 that the cryptocurrency bill was unable to gain traction. Nirmala Sitharman, India’s finance minister, has stated that the government will not take a blanket approach.

Despite assurances from India’s finance minister and many insiders pointing to a positive regulatory approach, the Reserve Bank of India or RBI continues to insist on a blanket ban.