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Sebi, RBI plan to bring digital gold under regulatory ambit

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Sebi, RBI plan to bring digital gold under regulatory ambit

The Ministry of Finance, the Securities and Exchange Commission of India (Sebi), and the Reserve Bank of India (RBI) are working to put digital gold and crypto assets under some regulation, as concerns about the unrestricted growth of such investments are not applicable to regulated Investor protection of securities. The government plans to address issues such as transparency, heinous statements, and lofty promises that some companies make to attract investors in unregulated assets.

Two officials who requested anonymity said that as part of the plan, the government may amend the Seby Act and the Securities Contract Supervision Act to classify digital gold as securities. On Saturday, Indian Prime Minister Narendra Modi (Narendra Modi) chaired a meeting with regulators to discuss and determine the long-term strategy for crypto assets. Previously, the Standing Committee on Finance held a meeting with stakeholders on Monday to determine their views on “opportunities and challenges related to crypto finance.”

Mint has reviewed a copy of the notice issued by the Standing Committee to engage in dialogue with the association and industry experts on cryptocurrency. Email inquiries about digital gold regulation sent to Sebi and the Ministry of Finance were not immediately answered. The proposal to regulate assets came after Sebi banned registered brokers and investment advisers from providing digital gold and other unregulated investment products in September and October. Regulators say that providing such products violates the Seby Act and may result in fines and, in some cases, cancellation of licenses.

Some financial technology companies that sell digital gold have to stop such sales, even if other companies spin off digital gold products to unregulated parent companies. Some companies offer digital gold as an investment product to attract customers who are unwilling to invest in stock-related products. The ban opens up opportunities for arbitrage, where regulated entities and unregulated companies of the Reserve Bank of India can provide digital gold without any penalties.

“Obviously there is regulatory arbitrage. We have never sold digital gold because we think it is not a good product, not for any other reason,” said Nithin Kamath, CEO and founder of the financial services platform Zerodha.

News Source : Hindustan Times

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