Instant Settlement Needed to Compete With Crypto, India's Markets Regulator Says

• The head of India's markets regulator says instant settlements are required to compete with crypto.
• Investors are likely to move to crypto if traditional markets "cannot offer tokenization and instantaneous settlement," SEBI's Madhabi Puri Buch said.

The chairperson of India's markets regulator has warned that if regulated markets don't offer instant settlement, investors will move to spaces like crypto.

Settlement refers to the final step in payments and securities trade.

Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (SEBI), announced plans to introduce faster settlements on Monday. India is planning to introduce a same-day settlement cycle from March 28 on an optional basis, making it the second country after China to do so while other nations typically settle within two days, a local report said.

“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," Buch said.

Buch addressed India pulling even further ahead of other jurisdictions in instant settlement speed, warning a "sizeable part of the market" could move to crypto. "Foreign portfolio investors have been grumbling about the operational challenges involved in moving funds to comply with faster settlement cycles," another report said.

The broader plan also includes adopting instant settlement, effective from March 2025. The plan is yet to be approved by the market regulator's board which is set to meet on Friday, the report said.

"Everybody wants instant everything. Right? So why should anyone believe that tomorrow if an alternative is available with instant settlement tokenization and they say the regulated market doesn’t offer it, you should expect people to move,” Buch said.

Bitcoin's price hit an all-time high crossing the $73,000 mark on Wednesday.

SEBI has historically played a distant role with regard to crypto in India.

At one point, it was deemed to become the regulatory authority that may oversee crypto regulation. However, since then, it has seemingly taken a back seat. SEBI falls under the administrative control of the nation's finance ministry, which recently led the Group of 20 in shaping global consensus around crypto regulation.

The Reserve Bank of India, the nation's central bank, has been a fierce critic of crypto while promoting its central bank digital currencies.

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