Sebi, RBI engage in turf war over Bitcoin regulation

The government’s proposal to regulate Bitcoin crypto currency has sparked a regulatory turf war between Securities and Exchange Board of India (Sebi) and Reserve Bank of India (RBI). According to sources, the central bank is of the opinion that bitcoin is a security rather than currency and should be regulated by Sebi. The proposal though has not gone down well with the latter opposing the suggestion. The finance ministry had last week called for a meeting of all the stakeholders to discuss the regulatory framework of the virtual currency. During the meeting RBI has proposed to allow trading in bitcoin on the lines of trading in commodity derivatives such as gold or silver. It also recommended that Sebi while regulating the currency ensure that it should not be used for any illegal activities like money laundering, terror funding. Sebi though had expressed displeasure over the RBI’s proposal. “It (bitcoin) cannot be classified as commodity derivatives as per extant legal provisions,” .

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