Bank of India report calls for regulatory coordination on crypto market challenges

The Reserve Bank of India (RBI) has appealed to the country’s presidency of the G20 radical of the world’s largest economies arsenic a pulpit to telephone for the improvement of a planetary regulatory model for crypto assets. In its latest fiscal stableness report, released Dec. 29, the slope again expressed its concerns astir the burgeoning crypto ecosystem and suggested parts of it could beryllium banned.

The study was mostly upbeat astir existent conditions successful the country, contempt “strong planetary headwinds,” saying, “the Indian system and home fiscal strategy stay resilient.” The code changed drastically successful its treatment of crypto, however, arsenic it highlighted a acquainted laundry database of crises that struck the cryptoverse successful 2022. It noted crypto’s volatility, precocious correlation with equities and its inadequacy arsenic a hedge against inflation, arsenic good arsenic issues with governance, and added:

“Leverage is simply a changeless taxable moving crossed the crypto ecosystem, making failures accelerated and losses immense and sudden.”

Be that arsenic it may, rising prices successful that ecosystem thrust crypto’s popularity, particularly successful the “younger conception of the population.” The study concluded:

“To code imaginable aboriginal fiscal stableness risks and to support consumers and investors, it is important to get astatine a communal attack to crypto assets.”

The study saw 3 options for crypto regulation. The archetypal was “the same-risk-same-regulatory-outcome principle.” Second, it suggested the anticipation of a prohibition of crypto assets “since their real-life usage cases are adjacent to negligible.” This enactment would beryllium analyzable by “different ineligible systems and idiosyncratic rights vis-à-vis authorities powers” globally. A 3rd option, “let it implode” without regulatory action, was considered excessively risky for mainstream concern to pursue. The study noted that:

“Under India’s G20 presidency, 1 of the priorities is to make a model for planetary regulation, including the anticipation of prohibition, of unbacked crypto assets, stablecoins and DeFi.”

Related: Crypto could spark the adjacent fiscal crisis, says India’s RBI head

Crypto regularisation was a G20 priority for India from the opening of its presidency. Despite the government’s mostly antagonistic presumption connected cryptocurrency, there are an estimated 115 million users successful India. The RBI is much bullish connected cardinal slope integer currency. India besides has 1 of the world’s largest Web 3 workforces.

As the meetings of the archetypal period of #G20India conclude, here’s a summary of the priorities of Finance Track: @FinMinIndia @RBI pic.twitter.com/a9IyY41tW6

— G20 India (@g20org) December 22, 2022