Regulators must not block innovation in Crypto: India’s Chief Economic Advisor

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As a seasoned crypto investor with a decade of experience navigating the volatile and ever-evolving digital currency landscape, I find India’s Chief Economic Advisor V. Anantha Nageswaran’s stance on cryptocurrency regulation to be both refreshing and encouraging. Having witnessed the potential of Bitcoin and other cryptos firsthand, I wholeheartedly agree that regulators must not hinder innovation in this sector.

In a notable statement endorsing the crypto market, India’s Chief Economic Advisor, V. Anantha Nageswaran, emphasized that regulatory bodies should avoid hindering the progress of cryptocurrencies, including Bitcoin. Speaking at the Global Economic Policy Forum 2024 on Wednesday, he called for a careful consideration of Indian regulators to strike a balance between promoting innovation, taking into account its potential societal costs and benefits.

Nageswaran emphasized the importance of regulation, yet stressed that it mustn’t hinder creativity, particularly in promising sectors such as Bitcoin and digital currencies.

Nageswaran expressed, “Regulators should not hinder advancements in cryptocurrencies like Bitcoin. As a nation with limited resources and widespread financial ignorance, it’s important to discern how to encourage progress without encouraging reckless speculation.

In light of the postponement of the crypto policy discussion paper by the Indian administration, I, as an analyst, find myself expressing a perspective that aligns with Nageswaran’s statement. It’s crucial to note that, unlike some countries, India does not acknowledge cryptocurrencies as legal tender. Moreover, when it comes to capital gains taxation on cryptocurrencies, India imposes one of the highest rates in the world.

At the meeting, Nageswaran stressed the need for openness in regulatory practices, particularly within rapidly evolving sectors like cryptocurrency, online gaming, and innovative technologies. He highlighted the significance of establishing distinct guidelines for regulators to strike a balance between not hindering progress and ensuring that economic actions align with societal objectives.

Nageswaran emphasized that regulators ought to follow the same guidelines of openness and responsibility as those they govern are expected to do.

He emphasized that the same principles of transparency and social cost-benefit analysis, which we aim to enforce on regulated entities and certain financial innovations, should extend to the regulatory bodies as well. This means they should openly disclose information and critically assess their own decisions and actions.

Additionally, he pointed out a concern regarding non-elected regulatory entities, as they might lack the same level of responsibility as individuals who are chosen by popular vote.

Nageswaran stated that unofficial authorities aren’t subjected to the same level of scrutiny as those who are elected,” he said. “It’s crucial for regulators to maintain a high degree of integrity and establish mechanisms to monitor their own behavior.

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2024-12-11 15:03