India’s Plan: Speeding Stock Settlements to Curb Crypto Exodus

India’s stock market is implementing a faster trade settlement mechanism in order to compete with the rising popularity of crypto exchanges. The Securities and Exchange Board of India (SEBI) plans to introduce a T+0 trade settlement cycle by the end of March, allowing for same-day settlement for traders. Up until now, the stock market has operated on a T+1 settlement cycle, meaning trades are settled the next day. The move to T+0 is seen as necessary to attract investors who expect faster settlement times, and to prevent them from moving to the crypto market.

SEBI believes that transitioning to T+0 will offer advantages such as instant receipt of funds and securities for investors. It will also eliminate the risk of settlement shortages and give investors more control over their funds and securities. The Indian government sees the need for faster settlement times in order to compete with the instant transactions offered by cryptocurrencies.

In a separate development, the Financial Intelligence Unit (FIU) of India’s Ministry of Finance has issued notices of noncompliance to several crypto exchanges, including Binance and Bitfinex, for illegally operating in the country. The exchanges have been given 12 days to comply with Indian Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. This action demonstrates India’s hesitation towards cryptocurrencies, despite its growing interest in blockchain technology.

India remains committed to adopting blockchain technology in other areas. The country recently announced that it has over eight million government-issued documents stored on five different blockchain platforms. These platforms, including Hyperledger Fabric, Hyperledger Sawtooth, and Ethereum, are being used in various initiatives such as certificate management, document storage, drug logistics, judiciary proceedings, and property ownership.

India recognizes the need to improve its stock market’s competitiveness against crypto exchanges, and introducing a T+0 settlement cycle is seen as a step in the right direction. The country remains cautious when it comes to cryptocurrencies, as shown by the notices of noncompliance issued to certain exchanges. India is embracing blockchain technology in other sectors to enhance transparency, security, and efficiency.

Roth Mckibben

Roth Mckibben

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