On December 28, Ajay Tyagi, the chairman of the Securities and Exchange Board of India (SEBI) encouraged mutual funds to resist investing in crypto-related assets as they wait for the government to consider new cryptocurrency rules.

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While speaking at a press conference on Tuesday, Ajay advised mutual fund companies to refrain from investing in funds linked to crypto assets until the government clarifies the policy and regulatory framework.

The recent warning from SEBI comes after the assets management firm (AMC), Invesco mutual fund delayed its blockchain fund last month due to the uncertainty with the legislative. They did so even with approval from SEBI. 

Invesco is not the only mutual fund in India wanting to get into the crypto space since earlier this month, Navi mutual fund also filed a draft with SEBI to have a blockchain index fund of funds (FoF) that will track the IndxxBlockain Index. However, the index does not track crypto assets directly but tracks mainstream firms such as Nvidia, Superior Micro units and other firms with crypto activities.

Nitin Sharma, a partner at Antler India and blockchain told Business Insider that it is prudent for regulated entities with public markets exposure to wait for clarity regarding the legality of digital assets as securities or commodities in India.

India Grappling To Develop Crypto Laws

As reported by Blockchain.News, India has already witnessed a high rise in crypto popularity despite the regulatory environment for cryptocurrencies in the country being suspicious. India’s cryptocurrency and regulation of the official Digital Currency Bill (2021) are still pending and awaiting approval from the cabinet.

The parliament has been discussing cryptocurrency during the winter session recently.  The talks gained further momentum after a parliamentary standing committee on finance’s meeting with cryptocurrency stakeholders to identify opportunities and challenges that may arise due to crypto financing and investment.

The Indian government had plans to introduce the cryptocurrency and regulation of the official Digital currency bill, 2021, in the parliament for debate. However, the bill is not a priority for India’s lower house as it concludes the winter session.

Narendra Modi, Indian prime minister, has been vocal on the issues of cryptocurrencies in 2021, urging democratic nations to collaborate to gain more from cryptocurrencies and blockchain technologies. He also warned against their malicious use during the recent Sydney Dialogue.

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