Last Updated on 16/12/2021 by Ulka
While central banks in several nations want cryptocurrencies outlawed, the International Monetary Fund has backed the industry (IMF). Gita Gopinath, who will shortly become the IMF’s first-ever Deputy Managing Director, spoke at an event hosted by the National Council of Applied Economic Research (NCAER) and urged emerging economies to regulate cryptocurrencies rather than ban them.
“I believe that cryptocurrencies pose a unique challenge to emerging markets.” Cryptocurrencies appear to be more appealing to emerging markets than to industrialised economies. “However, emerging markets have exchange rate and money flow controls, and cryptocurrencies can have an influence,” Gopinath explained.
Furthermore, Gopinath stated that “really banning crypto” is difficult due to the fact that many exchanges are based offshore and are not subject to local legislation. She stated that a global regulation on cryptocurrencies is urgently needed since the simplicity of transactions in this sector means that no single government can solve the problem alone.
Cryptocurrencies should be regulated rather than banned.
According to Gopinath, the fact that people are using cryptos as an investment asset should mean that the same rules that apply to other investment classes should also apply to these digital assets – banning cryptos would be difficult for policymakers to implement, so a global policy on cryptocurrency was needed.
Gopinath’s remarks come as the Indian government prepares to introduce a bill in Parliament on cryptocurrency. While previous reports based on the agenda for the Parliament’s current Winter Session suggested an all-encompassing ban on cryptos, such fears have been mostly allayed.
Instead, the Indian government is anticipated to introduce legislation governing cryptocurrencies and their trade in India. The Winter Session of Parliament, however, concludes on December 23, and no decision on the bill has yet been made. So it’s possible it won’t be tabled after all. The crypto law was again on the agenda in January, just before the Budget session, but it was not tabled.