India’s chief economic advisor, V. Anantha Nageswaran, recently spoke at the Global Economic Policy Forum 2024, emphasizing the importance of fostering innovation in the cryptocurrency sector while upholding transparency and accountability. Nageswaran highlighted the need for regulators to not impede progress in crypto and Bitcoin innovations, stressing the importance of balancing innovation with societal needs, especially in a country like India where financial illiteracy is a significant challenge.
He emphasized that regulators should not obstruct innovation with their criteria and should actively share information to ensure their actions align with societal goals. Nageswaran suggested that the same principles of transparency and social cost-benefit that apply to financial innovations should also apply to regulators themselves. By recognizing the limits of their unelected powers and adhering to these standards, regulators can support progress in fast-evolving sectors like cryptocurrency while safeguarding public interests.
India has been facing calls for regulatory clarity in the cryptocurrency sector, with regulators remaining relatively quiet about their stance on cryptocurrencies. A policy paper intended to clarify the status of crypto has been delayed multiple times as the country focuses on developing and testing its central bank digital currency, the digital rupee. The Reserve Bank of India, historically opposed to cryptocurrencies, has maintained a cautious stance, with rumors suggesting a preference for banning private cryptocurrencies due to concerns about financial stability and risks to investors.
Despite the regulatory uncertainty and a 30% tax on crypto gains, India has seen a surge in cryptocurrency adoption and usage, earning the top spot in Chainalysis’s Global Crypto Adoption Index. Recently, Jetking Infotrain, a prominent IT training company in India, made history by becoming the first publicly listed business in the country to add Bitcoin to its corporate treasury.
Overall, Nageswaran’s comments underscore the need for regulators to strike a balance between fostering innovation in the cryptocurrency sector and ensuring transparency and accountability in their actions. As India navigates the complexities of regulating cryptocurrencies, finding this balance will be crucial to supporting the growth of the sector while protecting the interests of the public.