Indian Finance Minister Urges ‘One-Regulation’ For Crypto
Nirmala Sitharaman, who is the Indian Ministry for Finance has brought into the Parliament Ministry’s Annual Survey of Economics.
The document presented to the Parliament is a highly important document as it contains the Indian economy’s progression data pertaining to the previous year.
The said document is also a benchmark for predicting the future of the economy in the preceding year.
The annual survey of the Finance Ministry was also unique in the sense that for the first time, it also talked about cryptocurrencies.
This highly crucial document suggested a ‘common approach’ towards laying down regulations governing digital currencies and assets.
Economic Survey Sheds Light on FTX Disaster
India’s economic survey, comprising over 414 pages, while discussing various key factors of the economy, also discussed in detail the collapse of the FTX platform.
It was noted in the document that the massive ‘sell-off’ of digital assets was accelerated right after the fall of the global crypto exchange, FTX.
The document hence further highlighted the lacunas and gaps in the crypto ecosystem which led to the eventual end of FTX.
Digital Assets According to India’s Economic Survey
In the economic survey, digital assets have been described as ‘untested non-reliable assets’ which also ‘lack underlying value’.
This classification of digital assets is in conformity with the digital assets’ description often suggested by the Reserve Bank of India (RBI).
RBI, which is India’s central bank, has repeatedly warned that ‘digital assets possess no tangible value yet the risks are unthinkable’.
RBI has also warned in the past that the ‘existence of digital assets in India is risky against the national economy’s stability’.
The Reserve Bank of India has taken a very aggressive stance against cryptocurrencies and their distribution. As per the regulator, the existence of cryptocurrencies is equal to the major crisis in the global economy.
The country cannot take the risk of adopting cryptocurrencies and letting investors interact with them. In case of any downtrends or scams, it is the investors who are impacted directly.
Unfortunately, the losses that the investors face are the civilians of India and that would tremendously hurt the country’s economy.
In this background, RBI had urged many times in the past that digital assets of Bitcoin kind should be banned permanently.
Survey Adopts US’s Approach towards Digital Assets
The bare perusal of India’s economic survey shows that it has taken inference from the US’s approach towards Bitcoin and other cryptocurrencies.
The document mentioned that the regulators in the US have rejected digital currencies on the pretext that they are ‘securities’.
It further claimed that US regulators are of the view that crypto as securities must immediately be registered.
However, the economic survey’s findings to the extent that Bitcoin is a ‘security’ are totally misleading.
The fact is that the Securities and Exchange Commission of the US has reiterated time and again that Bitcoin is a ‘commodity’.
The survey then made another reference to US’s top regulators. For instance, it referred to the Federal Reserve, SEC, Comptroller of Currencies, etc. to argue that these authorities are concerned about cryptocurrencies.
Global Approach Towards Crypto
The document then discusses the global approach aimed at crypto regulations.
For example, it noted the concerns of states like the UK, Nigeria, EU, Switzerland, Japan, etc.
These countries, along with others, have been recommending a ‘common approach’ towards laying down digital asset governing regulations.
In this context, Indian Finance Ministry pointed out that regulating crypto has been a global challenge with which the world is struggling.
The economic survey as well as the statements of the Indian Finance Minister suggest that India is keen on developing crypto regulations.
However, the state has been urging such regulations for the past more than four years. In the process, India hasn’t been able to come up with any of the crypto regulations.