The Asset Tokenisation (Regulation) Bill was introduced in India’s upper chamber, the Rajya Sabha, two weeks ago. The bill was proposed by MP Raghav Chadha, aged 37, rather than the government, making its passage into law unlikely. The last time a private member bill was enacted as legislation by both houses of parliament in India was in 1970.
That said, it puts the topic firmly on the government’s radar. Despite originating outside government, the bill takes a conservative approach. It makes no mention of decentralized finance (DeFi), and its architecture reflects that omission. All tokens must be custodied by a regulated intermediary rather than held in self hosted wallets, and all trading venues must be authorized.
The bill is wide ranging in scope, covering stablecoins to be regulated by the central bank, securities under SEBI oversight, and a broad array of other asset classes including real estate, commodities, carbon credits and intellectual property. At present, cryptocurrencies including stablecoins sit in a regulatory grey area, captured only by tax and KYC and AML requirements under the country’s anti money laundering framework. Much of India’s crypto trading activity takes place on offshore platforms as a result.
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