MUMBAI – Securities and Exchange Board of India Chairman Ajay Tyagi urged domestic mutual funds to avoid investments in crypto-related products until there is a law for these digital assets in the country.

The regulator’s comment comes after Invesco Mutual Fund withdrew the launch of its Blockchain fund which aimed to invest in companies that are part of the blockchain ecosystem. The fund of funds was established to provide a way for Indian investors to invest in such foreign listed new age companies.

Although the India-Invesco CoinShares Global Blockchain ETF fund of funds has received approval from SEBI, the fund’s launch has been put on hold due to uncertainties surrounding cryptocurrency law in India.

The government is currently in the process of tabling a cryptocurrency bill in Parliament. While the bill was due to be tabled in the winter session, experts now expect it to be presented in the next budget session.

The bill is expected to broadly ban the use of cryptocurrencies as a medium of exchange, although it is likely to allow Indians to hold cryptocurrencies like Bitcoin and Ethereum as digital assets. In addition, media have indicated that the government may hand over the reins of regulating the crypto industry to the capital market regulator.

Experts are of the opinion that the regulation of cryptocurrencies will allow Indian institutional investors to participate in the crypto market, as they have avoided the asset class due to the uncertainties and its volatile nature.

Navi Mutual Fund recently filed a project with SEBI for a blockchain index fund of funds that will track the IndxxBlockchain index, a gauge for companies involved in this ecosystem.

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