Capital markets News

Indian regulator SEBI: instant settlement, tokenization needed to compete with crypto

India SEBi Chair

During a press conference, the Chair of the Securities and Exchange Board of India (SEBI), Madhabi Puri Buch, said instant settlement and tokenization are necessary to compete with crypto. India already offers one day settlement (T+1), with optional same day settlement launching later this month.

The SEBI Chair said some capital markets participants questioned the need for instant settlement.

“Our logic is that we have an extremely well regulated, risk mitigated market,” said Madhabi Puri Buch. “If our well regulated market cannot compete with the crypto world and cannot say we also offer you tokenization and instantaneous settlement, over the medium term – I won’t even say long term – you should expect investors to move where they allow (this). The whole generation is about instant everything.” 

India was one of the first major capital markets to move to one day settlement (T+1), phasing it in from 2021 through to January 2023. Optional T+0 will launch at the end of this month with trades through to 1.30 pm settling at 4.30pm. In March 2025 it will introduce optional instant settlement.

Some market participants welcomed the move, but the Indian financial outlet Mint reported that brokers may not be keen. They hold client funds and earn interest on the balance. Shortening settlement times will reduce their interest earnings.

As the SEBI Chair noted, other jurisdictions aren’t finding the move to T+1 straightforward. The United States is scheduled to go live on May 28 this year.

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