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Wednesday, October 4, 2023

Stability to protect investors, India points to 3 problems with cryptocurrencies

GANDHINAGAR: As a world agencies In developing a framework on crypto assets, the Indian authorities want three key issues to be addressed, including macroeconomic and financial stability, risks, and investor protection and education, while ensuring that technological innovation is not affected.
The senior officials’ comments came a day after the Financial Stability Board (FSB) released its recommendations, while noting that “some jurisdictions may also decide to take more restrictive regulatory action.” Following the meeting of G20 finance ministers and central bank governors, FM Nirmala sitharaman He told reporters that the IMF-FSB synthesis document is expected in time for the leaders’ summit in Delhi in September.
Indian authorities are waiting for clarity on the global architecture before deciding how they want to move forward with crypto assets. In the past, the RBI has called for a ban on the instrument, citing multiple risks, ranging from currency and monetary policy to money laundering.
RBI Governor Shaktikanta Das said that the FSB document does not address the critical issue of financial stability, though he noted that some of the “hype” around cryptocurrencies had “dimmed” due to the collapse of some of the exchanges. And the loss. to investors. “Everyone recognizes the enormous risk,” he said, adding that the Bank for International Settlements (BIS) had also taken note of the problem.
“Until now, cryptocurrencies have failed to harness innovation for the benefit of society. Crypto remains largely self-referential and does not fund real economic activity. It suffers from inherent deficiencies related to stability and efficiency, as well as accountability and integrity. These structural flaws are the result of underlying economics of incentives rather than technological constraints…the inherent structural flaws of cryptocurrencies make them unsuitable to play a significant role in the monetary system,” BIS said in a recent report.
Meanwhile, the Indian government will circulate a presidential note giving its position on the issue. “We continue to closely monitor the risks of accelerating developments in the crypto-asset ecosystem,” the president’s summary released after the meeting said. He also sought a quick implementation of the “crypto asset reporting framework.”

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