MUMBAI – The Securities and Exchange Board of India’s Chairman Ajay Tyagi today said that domestic mutual funds cannot make investments in crypto-related products till there is a law for such digital assets in the country.
The Sebi chief was speaking at a press conference following the capital market regulator’s board meeting here.
The regulator’s comment comes after Invesco Mutual Fund withdrew the launch of its Blockchain fund that aimed to invest in companies that are part of the blockchain ecosystem. The fund of fund was set to provide Indian investors a route for investing in such new-age companies listed abroad.
Despite the India-Invesco CoinShares Global Blockchain ETF Fund of Fund receiving approval from SEBI, the launch of the fund was put on hold due to uncertainties around cryptocurrency law in India.
The government currently is in the midst of bringing a cryptocurrency bill in the Parliament. While the bill was expected to be tabled in the winter session, experts now expect it to be introduced in the upcoming Budget session.
The bill is widely expected to ban use of cryptocurrencies as a medium of exchange, although it is likely to allow Indians to hold cryptocurrencies like Bitcoin and Ethereum as a digital asset. Further, media reports have indicated that the government may hand the reins of regulating the crypto industry to the capital market regulator.
Experts are of the view that regulation for cryptocurrencies will allow the institutional investors in India to participate in the crypto market, as they have shied away from the asset class due uncertainties and its volatile nature.
Navi Mutual Fund has recently filed a draft with SEBI for a blockchain index fund of fund that will track the IndxxBlockchain Index, a gauge for companies involved in that ecosystem.
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