India’s chief economic advisor calls for regulation that doesn’t hinder crypto innovation

India’s chief economic advisor wants regulators to encourage innovation in the cryptocurrency sector while maintaining transparency and accountability.

Speaking at the Global Economic Policy Forum 2024, V. Anantha Nageswaran, Chief Economic Adviser at the Ministry of Finance, said regulators “should not stand in the way of so-called innovations in crypto and Bitcoin.”

Pointing out that financial illiteracy is a major problem in India and even in developed countries, he emphasized the need to balance innovation with social needs.

“We need to ensure that the criteria set for regulators do not stifle innovation,” he added.

Additionally, Nageswaran emphasized the importance of transparency and stressed that regulators must actively share information and ensure their actions are aligned with societal goals. In his view, “the same principles of transparency and social cost-benefit” that apply to financial innovations should apply to regulators themselves.

He argued that by adhering to these standards and recognizing the limits of their unelected authority, regulators can support progress in rapidly developing industries like cryptocurrency while protecting the public interest.

Nageswaran’s comments came amid calls for regulatory clarity in the country. Regulators in India have been relatively quiet on their stance on cryptocurrencies, leaving the industry to grapple with uncertainty around policies.

The policy document, which was supposed to clarify the status of crypto, has been repeatedly delayed as the country directs its resources to developing and testing the digital rupee, a central bank digital currency.

The Reserve Bank of India, which has historically opposed cryptocurrencies, has taken a cautious stance; Some reports claim that the regulator supports banning private cryptocurrencies due to concerns about financial stability and risks to investors.

Despite harsh conditions where investors face a 30% tax on crypto gains, the most populous country has witnessed a surge in crypto adoption. It ranks top in Chainalytics’ latest Global Crypto Adoption Index.

Recently, Jetking Infotrain, the country’s leading IT training company, made history after becoming the first public company in India to add Bitcoin to its corporate treasury.