Woofun AI reports that India's Standing Committee on Finance has advised the government to create a temporary regulatory framework managed by recognized Self-Regulatory Organizations. This interim structure aims to oversee the domestic cryptocurrency and virtual digital asset sector, addressing concerns that the absence of a clear legal framework exposes retail investors to operational, custodial, and fraud risks.

The proposed SRO would operate under the direct supervision of either the Reserve Bank of India or the Securities and Exchange Board of India. Its mandate includes implementing standardized codes of conduct for consumer protection, platform transparency, and token disclosure. Key responsibilities involve auditing exchange reserves, ensuring the segregation of customer funds from corporate assets, and establishing user complaint mechanisms. The committee emphasized that this temporary arrangement must address macroeconomic risks, including cross-border capital flows, stablecoin dollarization, tax evasion, and violations of foreign exchange laws.