Gita Gopinath suggests regulation instead of ban on cryptocurrencies
- Gita Gopinath urged for a global policy on the matter to be implemented as soon as possible
- Cryptocurrency Bill in India is unlikely to be brought during the current Winter Session of Parliament
- Gopinath was recently appointed as First Deputy Managing Director of the IMF
Gita Gopinath, chief economist at the International Monetary Fund (IMF), said on Wednesday that emerging economies should regulate cryptocurrencies rather than banning them. She urged for a global policy on the matter to be implemented as soon as possible.
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"Regulating crypto assets and currencies is essential, especially for emerging and developing economies, as banning them may not work as crypto exchanges are located offshore, which makes it easier for an individual to trade in them despite the ban," Gopinath said, delivering a lecture on 'Global Recovery and Policy Challenges in 2022' organised by the National Council of Applied Economic Research (NCAER).
Given the complexities of cross-border transactions, she asserted that no single country could tackle the problem on its own. "There is an urgent need for a global policy on it."
She noted that the adoption of cryptos poses a barrier to emerging and developing economies, as most of them have foreign transaction rules. "Cryptos pose problems as usually emerging developing economies have exchange rate controls, capital controls, and capital flow measures," she said. "Crypto assets and currencies can be used to evade those regulations."
The much-anticipated Cryptocurrency Bill in India is unlikely to be brought during the current Winter Session of Parliament. The Bill, which was included in the government's legislative agenda for the Winter Session, aims to "create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India."
In addition, it intends to outlaw all private cryptocurrencies in India. However, it "allows for specific exceptions to promote the underlying technology of cryptocurrencies and its usage," according to the Bill scheduled for introduction.
"The IMF's Chief Economist, @GitaGopinath, called on PM @narendramodi," the Prime Minister's Office (PMO) tweeted, along with a few photos from the meeting.
Gopinath was recently appointed as First Deputy Managing Director of the IMF. She will take over from Geoffrey Okamoto, who is leaving the Fund early next year.