India’s Market Regulator Urges Instant Settlements to Compete with Crypto

SEBI Chief Madhabi Puri Buch highlights the need for instant settlement in traditional markets to prevent investors from shifting to cryptocurrency.

1. SEBI’s head states traditional markets need instant settlements to compete with crypto.
2. “Investors are likely to move to crypto if traditional markets cannot offer tokenization and instantaneous settlement,” said SEBI’s Madhabi Puri Buch.

The chairperson of India’s market regulator warns that without instant settlement offerings, investors might gravitate towards cryptocurrencies.

Settlement is the conclusive phase in the process of trading payments and securities.

On Monday, Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India (SEBI), revealed initiatives to introduce quicker settlement processes. From March 28, India plans to implement a same-day settlement cycle on an optional basis, becoming the second country after China to do so. In contrast, other countries generally complete settlements within two days, according to a local report.

“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 stated.

Buch also discussed India’s advancements in speeding up settlement processes, cautioning that a “sizeable part of the market” might switch to cryptocurrencies. “Foreign portfolio investors have been grumbling about the operational challenges involved in moving funds to comply with faster settlement cycles,” another report highlighted.

The broader scheme includes plans for instant settlement by March 2025, awaiting approval from the market regulator’s board, which is scheduled to meet on Friday, as mentioned in the report.

“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 remarked.