India is poised to implement faster trade settlement mechanisms in its stock market to enhance competitiveness amid increasing investor preference for cryptocurrency exchanges. Securities and Exchange Board of India (SEBI) Chairman Madhabi Puri Buch announced plans on March 11 to introduce a T+0 trade settlement cycle by March 28. This service, which is optional for traders, targets individuals engaged in day trading settlement activities.
Since 2021, the Indian stock market has operated on a T+1 settlement cycle, where all stock transactions are settled the following day. The transition to T+0 settlement will occur gradually, similar to the introduction of the T+1 settlement cycle. Buch emphasized the significance of adopting T+0 to enable Indian stocks to better compete with cryptocurrencies. She noted that investors increasingly expect instant settlement, and failure to provide this could lead investors to gravitate towards areas offering quicker settlement, such as the crypto world.
SEBI highlights several advantages of the T+0 and instant settlement cycle for investors, including immediate receipt of funds and securities. Moreover, same-day settlement reduces the risk of settlement shortfalls and affords investors greater control over their assets. This move underscores India's efforts to modernize its stock market infrastructure and align with evolving investor expectations in a digital age.
In a separate development, India's Financial Intelligence Unit (FIU), under the Ministry of Finance, issued violation notices to several cryptocurrency exchanges, including Binance, HTX, and Kraken, on December 28, 2023. The notices demanded compliance with India's "know your customer" and anti-money laundering regulations within 12 days, highlighting ongoing regulatory scrutiny in the crypto sector.
Despite maintaining a cautious stance towards cryptocurrencies, India continues to embrace blockchain technology in various national initiatives. The country recently disclosed that it hosts over 8 million government-issued documents on five distinct blockchain platforms. Notably, India leverages major blockchain platforms such as Hyperledger Fabric, Hyperledger Sawtooth, and Ethereum to develop various products, including certificate chains, document chains, and pharmaceutical logistics chains, among others.
