India’s Parliamentary Standing Committee on Finance has proposed a temporary self-regulatory organisation for cryptocurrencies and other virtual digital assets, arguing that an interim structure is needed until Parliament adopts a full legal framework. The recommendation arrives shortly after the Reserve Bank of India renewed its warnings about the risks tied to crypto assets.

Interim oversight proposal

In Report No. 36, submitted on July 23, 2026, the committee called for a transitional regulatory framework centred on a recognised self-regulatory organisation, or SRO. The body would supervise the crypto and virtual digital asset industry on an interim basis rather than serve as a permanent substitute for legislation.

According to the proposal, the SRO should work under the oversight of either the Reserve Bank of India or the Securities and Exchange Board of India. Its remit would include investor protection, governance standards, transparency, disclosure requirements, compliance, segregation of customer funds, and systems for handling complaints.

RBI concerns remain central

The committee’s move follows recent warnings from the RBI, which has continued to raise concerns around the sector. The central bank has pointed to risks including financial stability, monetary sovereignty, money laundering, terror financing and tax evasion.

Those concerns have shaped India’s cautious approach to digital assets. While the country has imposed a 30% tax on crypto gains, along with a 1% tax deducted at source and anti-money laundering requirements, it still does not have a dedicated statutory framework specifically governing crypto assets.

Broader legal questions

Beyond the proposed stopgap mechanism, the panel also recommended that policymakers consider a separate statutory framework covering cryptocurrencies, NFTs and DeFi tokens. It further urged the use of technology-neutral securities laws so that tokenized securities can be covered without creating regulatory loopholes.

The report also highlighted the need for clearer legal definitions around virtual digital assets. In particular, it said there should be clarity on whether tokenized securities issued by crypto exchanges and investment products would fall under a proposed Securities Market Code.

Next steps for authorities

In the near term, the Finance Ministry, RBI, SEBI and FIU IND are expected to examine the committee’s recommendations and consider whether an SRO-led model could be introduced through regulatory guidance. The source article said such a move could tighten oversight of the sector and help shape wider digital asset legislation in 2026 and 2027.

India’s crypto market has expanded rapidly despite legal uncertainty, with millions of investors and substantial asset holdings cited as part of the backdrop to the committee’s recommendations. The panel’s proposal does not itself create binding rules, but it signals a push for more formal oversight while lawmakers and regulators continue to debate a broader legal regime.

Source: Coin Edition