India’s Chief Economic Advisor Calls for Balanced Crypto Regulation
During the Global Economic Policy Forum 2024, V. Anantha Nageswaran, Chief Economic Advisor to India’s Ministry of Finance, underscored the need to devise regulatory frameworks that will promote innovation in cryptocurrencies while ensuring that the same principles of transparency and accountability are maintained. He said that innovation in the crypto space is a must for progress, but it should not be at the expense of the needs of society.
Innovation Should Not Be Stifled
Nageswaran emphasized the need for balanced regulation, saying, “Regulators must not stand in the way of so-called innovations in crypto and Bitcoin.” He also pointed out that while innovation is the driver of economic growth, it must be complemented by addressing financial literacy challenges, which remain a big issue in both India and developed nations.
The regulations need not be so severe to discourage the growth of technological advances. In that aspect, them can also aim for a leading position in the rapidly changing cryptocurrency business area.
Transparency to Regulate
The Chief Economic Advisor further elaborated on how transparency should be regarded as a guiding principle. His contention was that, like financial innovations that should conform to social cost-benefit standards, regulators must lead by example themselves.
“Regulators should actively share information and ensure their actions align with societal goals,” he said. This approach, he suggested, would help build trust and enable progress in sectors like cryptocurrency while safeguarding public interests.
Current Regulatory Landscape in India
Nageswaran’s comments come at a time when them crypto market is seeing an increasing demand for regulatory clarity. A policy paper aimed at shedding light on the status of crypto assets has suffered repeated delays as the administration shifts focus to develop and test the digital rupee, CBDC of India.
The RBI has taken a cautious stance on cryptocurrencies, flagging risks to financial stability and possible harm to investors. But despite regulatory uncertainty and a steep 30% tax on crypto gains, India has emerged as a global leader in crypto adoption, ranking first in Chainalysis’s latest Global Crypto Adoption Index.
A Promising Future Amid Challenges
India’s crypto sector continues to reach key milestones. Recently, Jetking Infotrain became the first publicly listed Indian company to add Bitcoin to its corporate treasury. Such development mirrors the resilience and potential of the sector amid a testing regulatory environment.
With the right mix of innovation and accountability, experts say India can unlock the full potential of cryptocurrencies.
