As cryptocurrencies gain popularity and adoption as a viable alternative to conventional payment methods, governments and organisations worldwide struggle to determine how to regulate these new assets better.
According to Tobias Adrian, the Financial Counsellor and Director of the Monetary and Capital Markets Department of the International Monetary Fund (IMF), IMF is one of these organisations which has shifted its focus to India and identified cryptocurrency regulation as the country’s priority mid-term issue.
Adrian said on the sidelines of the annual IMF conference that the IMF’s view of India was “fairly positive” and that there were several opportunities and developments in India. There is hope for healing. There is great anticipation about new developments and fresh growth potential.
He also highlighted that “regulating crypto is certainly high” regarding the country’s mid-term structural challenges.
According to Adrian, this is now being done internationally, and the IMF’s financial stability board is attempting to develop global standards for crypto-asset regulations. India must also adopt it, although the country has altered its taxes on crypto assets, which is a positive development.
India takes a closer look at CBDCs.
Additionally, Adrian claimed that India was experimenting with central bank digital currencies (CBDCs), which may be significant for financial inclusion and growth.
He claimed that resolving outstanding regulatory issues in the banking and non-bank sectors was critical for the country’s growth and economic development.
The danger posed by ‘private crypto.
Meanwhile, India’s finance minister Nirmala Sitharaman has asked the government to agree on how to deal with cryptocurrencies, citing the risk of private digital currencies being used for money laundering and terrorist funding.
On April 19, she participated in a panel discussion where she emphasised the need for regulation as the only way to address these issues, which, in her view, no nation can deal with individually.
As she put it, “regulation using technology is the only answer. It will have to be so adept that it is not behind the curve, but be sure that it is on the top of it. And that’s not possible if any one country thinks it can handle it. It has to be across the board.”
In response to her worries, IMF managing director Kristalina Georgieva said that the institution would extend its crypto work in the nation, emphasising cyber security threats, private digital currency regulation, and CBDC interoperability.
The IMF has expressed its concern about crypto, and one of its most recent reports stated that cryptocurrency adoption was greater in corrupt nations with stricter capital controls. At the same time, the organisation opposes any cryptocurrency prohibitions, calling for more regulations instead.
