NEW DELHI: Even as the G20 under the India presidency has successfully set the stage for a globally coordinated policy and regulatory framework for crypto assets, the Indian government has emphasised the need for caution to ensure the well-being of the Indian financial ecosystem and macroeconomic stability.
A senior government official, while acknowledging the potential impact of cryptocurrencies on the digital economy, stated, “Crypto may not have a very obvious use case as such but we have to give that benefit of doubt to see what it can do to the digital economy. However, we will have to do it in a way that does not hurt the Indian financial ecosystem and macro-economic stability.”
He said although the use case for crypto assets may not be immediately apparent, it is crucial to provide them with the benefit of the doubt to explore their potential contributions to the digital economy.
However, any regulatory measures implemented must be carefully crafted to prevent adverse effects on the Indian financial system and overall macroeconomic stability.
In an effort to gather insights from various stakeholders, the release of the synthesis paper on crypto assets has been expedited by one month. This decision aims to facilitate leaders’ perspectives and input, ensuring a comprehensive understanding of the potential benefits and risks associated with cryptocurrencies, he added.
Meanwhile, Ajay Seth, Economic Affairs Secretary, on the sidelines of the G20 Summit said that the recommendations endorsed by the ministers will be taken forward. “Work needs to be done on multilateral development banks (MDBs) and cryptos will be taken up for detailed discussions. It’s not correct to say that the climate resilience debt clause(CRDC) has been on the table for a long,”
Seth said while further adding that the CRDC was discussed in Gandhinagar and would require more technical work. He said that the international financial architecture working group will dwell upon this issue soon. It must be noted that a paper by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) recently said that blanket bans that make all crypto-asset activities (trading and mining) illegal can be costly and technically demanding to enforce.