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Highlights
- Indian Economic Advisor emphasized the need for regulators to support innovation in sectors like crypto, Bitcoin, and online gaming.
- Nageswaran called for greater transparency from both regulators and regulated entities.
- On his final day as RBI Governor, former RBI governor Shaktikanta Das expressed strong support for India's CBDC, Digital Rupee.
Indian Economic Advisor (CEA) V. Anantha Nageswaran said that regulators should not stand in the way of crypto, Bitcoin, and gaming innovations. His comments send a strong signal to Indian regulators who have been trying to restrict banking associations with crypto firms in the past, as well as putting heavy taxes on crypto firms.
Indian Economic Advisor Favours Bitcoin, Crypto Innovation
While speaking at the Global Economic Policy Forum 2024, organized by the Ministry of Finance and the Confederation of Indian Industry (CII), Indian Economic Advisor Nageswaran emphasized the need for regulators to balance innovation with responsibility. This is particularly true for sectors such as cryptocurrency, bitcoin, and online gaming. The CEA said:
“In India, where there is extensive financial illiteracy, he said that regulators need to distinguish between not standing in the way of moonshots and in which sectors do we need to be more conscious of social cost and benefits, whether it is crypto, 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.
Indian crypto investors have been waiting long for regulatory reforms in Bitcoin and crypto innovation. Especially, they have been awaiting the reforms in crypto taxation, that apply a hefty 30% tax on crypto profits. Following the $230 million WazirX hack, Indian crypto exchanges have been finding it increasingly difficult to navigate the regulatory landscape.
Focusing on Digital Rupee CBDC Use Cases
During his last day at the office, the governor of India’s central bank – Reserve Bank of India (RBI) – Shaktikanta Das outlined his vision for transforming India’s economy with the introduction of a home-grown central bank digital currency (CBDC), the Digital Rupee.
Discussing India’s progress with CBDC development, Das pointed out that India has made significant strides in this area. While expressing optimism on the future of CBDCs, Das said:
“As I see it, CBDC has a huge potential in the coming years, in the future. In fact, it is the future of currency.”
Shaktikanta Das reaffirmed his strong support for Digital Rupee CBDC noting its ability to mitigate the uncertainties associated with cryptocurrency. As per the previous report, The central bank will be working with India’s top equities regulator SEBI to frame crypto policy for the country.
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