India stresses the need for a “common approach to regulating the crypto ecosystem” – Regulation Bitcoin News

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India’s Ministry of Finance highlighted the need for a “common approach to regulating the crypto ecosystem” in its flagship economic survey this year. “Crypto assets are self-referential instruments and do not strictly pass the test of being a financial asset as they have no intrinsic cash flows attached to them,” the Indian government said.

Ministry of Finance economic survey includes crypto this year

Indian Finance Minister Nirmala Sitharaman presented the 2022-23 economic survey to Parliament on Tuesday. The Economic Survey is an annual flagship document of the Ministry of Finance which describes the performance of the Indian economy in the previous financial year and outlines the economic outlook for the current financial year.

Including cryptocurrency for the first time this year, the economic study highlights the “need for a common approach to regulating the crypto ecosystem.”

The 414-page document explains, “The recent collapse of crypto exchange FTX and the subsequent sell-off in crypto markets has exposed vulnerabilities in the crypto ecosystem,” elaborating:

Crypto-assets are self-referential instruments and do not strictly pass the test of being a financial asset because they have no intrinsic cash flows attached to them.

India’s central bank, the Reserve Bank of India (RBI), has also repeatedly warned that the crypto has no intrinsic value, adding that it poses risks to the country’s financial stability. The RBI has recommended banning cryptocurrencies like bitcoin and ether.

The economic study also states that “U.S. regulators have disqualified bitcoin, ether, and various other crypto assets as securities.” However, US Securities and Exchange Commission (SEC) Chairman Gary Gensler confirmed that bitcoin is a commodity but would not comment on ether. Nonetheless, he pointed out that most of the other tokens are securities.

The Department of Finance’s economic survey then refers to a joint statement issued on January 3 by the US Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) which highlighted the concerns of the three agencies. on the risks that cryptocurrencies pose to the banking system.

The investigation continues:

The geographically ubiquitous nature of the crypto ecosystem necessitates a common approach to regulating these volatile instruments. Against this backdrop, the global response to cryptos is evolving.

The paper then examines current regulatory approaches around the world, including in the European Union, Japan, Switzerland, the United Kingdom, Albania and Nigeria.

“Cryptocurrency oversight and regulation has been tricky, and regulators around the world are struggling to keep up with new and emerging issues in the rapidly evolving uncharted field,” the survey adds, noting:

There are minimum global standards for unbacked crypto assets, which do not currently mitigate all risks and vulnerabilities.

The survey details that standards bodies have made efforts to adjust and develop crypto regulatory standards. However, they focus on specific issues or sectors. “Thus, there are regulatory gaps at every step when crypto assets are issued, transferred, exchanged or stored by non-bank entities,” the document concludes.

India has been trying to develop a crypto policy for several years. A crypto bill was published in July 2019 but was not taken up in parliament. The finance minister has previously said that the Indian government plans to discuss crypto regulation with G20 members to establish a technology-driven regulatory framework for crypto assets. Last month, the government unveiled its plan to launch a crypto awareness program.

Meanwhile, the RBI is piloting its central bank digital currency (CBDC). A digital rupee wholesale pilot was launched in November last year, while a retail pilot started in December.

Tags in this story Economic Survey, Crypto Economic Survey, Cryptocurrency Economic Survey, Finance Minister, Crypto India, Cryptocurrency India, Indian Economic Survey, Crypto Indian Economic Survey, Nirmala Sitharaman, Nirmala Sitharaman crypto, rbi crypto, Budget Union, Union Budget cryptocurrency

What do you think of the Indian government including cryptocurrency in this year’s economic survey and emphasizing a “common approach to regulating the crypto ecosystem”? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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