The Indian government’s chief economic adviser has warned against innovations such as crypto and decentralized finance (defi) in the absence of regulation. “We may not be fully aware or understand the kind of forces that we release ourselves,” he said.
Indian government’s chief economic adviser is skeptical of crypto, mistrust and decentralization
Chief Economic Adviser (CEA) to the Government of India, V. Anantha Nageswaran, reportedly warned of the danger of crypto and the risks posed by its lack of regulation on Thursday during an event in Assocham. Referring to cryptocurrency, he was quoted by local media as saying:
The more decentralized they become and the lack of a centralized watchdog or regulatory authority also means that there is a world of Caribbean pirates or a ‘winner takes all’ world in terms of being able to take it all in someone else.
The government’s economic adviser explained that he agreed with Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar on crypto and decentralized finance (defi). The RBI official warned that there currently appears to be a case of regulatory arbitrage when it comes to crypto and the challenge rather than true financial innovation.
Referring to defi, Nageswaran said:
In my opinion, even if it is considered an innovation, I would reserve judgment on whether it is really innovative or really disruptive in a positive sense or if it is something that we will end up regretting.
Commenting on whether cryptocurrency could be an alternative to fiat currencies, the economic adviser pointed out that it must “serve many purposes”. He clarified, “It has to be a store of value, it has to be widely accepted, and it has to be a unit of account… In all of these cases, new ‘innovations’ such as crypto or the challenge still have to pass the test. .”
So I wouldn’t be very excited about them because sometimes we’re not fully aware or understanding the kind of forces that we ourselves are releasing.
“I would be somewhat cautious in my welcoming of some of these fintech-based disruptions like challenge and crypto etc,” he noted.
The Indian government is currently working on the country’s crypto policy. The Department of Finance has consulted with the International Monetary Fund (IMF) and the World Bank on crypto regulation. Last week, the Securities and Exchange Board of India (SEBI) said the decentralized nature of crypto makes regulation difficult.
Meanwhile, India’s central bank remains skeptical of the crypto. On Friday, RBI Governor Shaktikanta Das warned investors against trading in cryptocurrencies, reiterating that they “pose huge risks to financial stability.”
What do you think of the remarks of the chief economic adviser of the Indian government? Let us know in the comments section below.
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Indian Government’s Chief Economic Adviser Warns Of Crypto Danger, Defi Without Regulation Bitcoin Regulation News
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