'If Our Regulated Markets Can't Compete With Crypto...': SEBI Chief Addresses Investor Migration Concerns

With the advent and now visible growth of cryptocurrencies, traditional market practices are looking at an urgent revamp around the world. Earlier this week, Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (SEBI), highlighted some important tweaks for traditional markets to implement on priority to retain its investor-base. Buch said if these changes were not ushered in soon, investors could migrate to other options like cryptocurrencies. Buch's statement comes at a time when the crypto sector is undergoing a bull run with BTC trading at $71,733 (roughly Rs. 59.3 lakh) and the crypto market valuation touching $2.71 trillion (roughly Rs. 2,24,25,141 crore).

On the sidelines of an AMFI event on Monday, Buch said that the introduction of features like instant settlements and tokenisation were long overdue in the traditional markets arena.

“If our well-regulated market cannot compete with the crypto world and cannot say we also offer you tokenisation and instantaneous settlement over the medium term, I won't even say long term, you should expect investors to move," Buch said at the event.

Aiming to retain investors within the traditional markets arena, SEBI is gearing up to offer, as an optional service, a same-day settlement cycle from March 28.

“Why should anyone believe that tomorrow if an alternative is available with instant settlement tokenisation and they say the regulated market doesn't offer it... you should expect people to move,” Buch further added.

This is amongst those rare times that the SEBI, in its own subtle way, acknowledged the boom in the crypto sector and the competition that regulated markets face from crypto.

After Bitcoin's inception in 2009, over 2.2 million cryptocurrencies have come under circulation. As per CoinMarketCap, over 700 crypto exchanges are offering crypto services to millions of entities.

At this point, several cryptocurrencies including BTC and ETH are chasing new all-time highs. The gradual deployment of rules and regulations like EU's MiCA and G20's roadmap to oversee the global crypto industry have managed to increase investor confidence. As soon as the US approved 11 BTC ETF proposals this January, investors rushed to trade in BTC through traditional exchanges. This has resulted in the current bull run for the digital assets industry.

As far as India's stance on crypto is concerned, the SEBI chief's concerns shared this week hint that India is not taking the crypto sector for granted. Despite RBI's constant calls for a blanket ban on the crypto sector, the Indian government not only brought crypto under the national tax regime, but also spearheaded G20's initiative to start the work on crypto rules that would work on a global level.

For now, India does not accept any cryptocurrency as an alternative to its fiat Rupee. Trading and holding cryptocurrencies, however, is permitted in the country. Some merchants also accept payments in cryptocurrencies, but such entities are miniscule in number.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.