Indian Economic Advisor Slams Regulators on Opposing Bitcoin & Crypto Innovation

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As a seasoned analyst with over two decades of experience in the financial sector, I find the recent statements from Indian Economic Advisor V. Anantha Nageswaran and RBI Governor Shaktikanta Das intriguing. Both leaders seem to be advocating for a balanced approach towards innovation and regulation, particularly in sectors like cryptocurrency, bitcoin, and online gaming.

V. Anantha Nageswaran, Economic Advisor (CEA) of India, suggested that regulatory bodies should not hinder or obstruct advancements in areas such as cryptocurrencies like Bitcoin, innovative gaming platforms, and so forth. This statement implies a strong recommendation for Indian regulators who have historically attempted to limit banking connections with crypto businesses and impose high taxes on these firms.

Indian Economic Advisor Favours Bitcoin, Crypto Innovation

At the Global Economic Policy Forum 2024, held by the Ministry of Finance and CII, Economic Advisor Nageswaran of India emphasized the importance of striking a balance between fostering innovation and ensuring responsibility, especially in sectors like cryptocurrency, bitcoin, and online gaming. The CEA made this statement: “It’s crucial to strike a balance.

In countries like India, with a high level of financial ignorance, it was suggested that regulators should discern between avoiding obstacles for groundbreaking innovations (moonshots) and identifying areas where we must consider the balance of social costs and benefits more carefully. This applies to emerging sectors such as cryptocurrencies, bitcoins, and online gaming.

The Indian Economic Advisor also highlighted India’s significant financial illiteracy while stressing that regulators must distinguish between not hindering innovations and being mindful of the social costs and benefits. “We need to ensure that the criteria set for regulators do not obstruct innovation,” he said.

CEA Nageswaran also called for absolute transparency for both regulators and regulated entities. He added that the principles of transparency and social cost-benefit that apply to financial innovations should be also applicable to the regulators themselves. Nageswaran said that regulators should remain conscious of the limits of their unelected powers.

Crypto enthusiasts in India have been eagerly anticipating updates in Bitcoin and cryptocurrency regulations for quite some time now. Specifically, they are looking forward to changes concerning taxation of cryptocurrencies, which currently imposes a substantial 30% tax on profits. The recent $230 million hack on WazirX has made it more challenging for Indian crypto trading platforms to maneuver through the complex regulatory system.

Focusing on Digital Rupee CBDC Use Cases

On his final day in the office, Governor Shaktikanta Das of the Reserve Bank of India (RBI) shared his plans to revolutionize India’s economy by introducing a domestically developed digital version of the Indian rupee – a central bank digital currency (CBDC), known as the Digital Rupee.

Speaking about India’s advancements in Central Bank Digital Currency (CBDC) technology, Das noted that India has taken substantial steps forward in this field. Expressing a positive outlook for the future of CBDCs, Das stated:

In my opinion, Central Bank Digital Currencies (CBDCs) could significantly impact the financial landscape in the approaching years, even shaping the future of money itself.

Shaktikanta Das emphasized his firm backing for the Digital Rupee CBDC, highlighting its potential to address the risks inherent in cryptocurrencies. According to recent news, the central bank plans to collaborate with Securities and Exchange Board of India (SEBI) to establish a national crypto policy.

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2024-12-11 14:05