The former RBI governor Dr. Bimal Jalan commented on India’s crypto bill during a TNIE interview, suggesting a framework to ensure crypto transparency and regulate the financial industry.
Former Reserve Bank of India governor Dr. Bimal Jalan believes that the central bank should collaborate with the government to regulate the financial space. Jalan thinks the authorities need to classify crypto as a currency and not legal tender. He added that banning cryptocurrencies is not desirable. Moreover, the government can review taxation policies after authorities classify digital coins as currency. Such steps can mean imposing crypto capital gains tax rates.
The official said digital coins have no problems but require regulation and transparency. A complete ban isn’t desirable as cryptos exist globally. Jalan told TNIE jurisdictions should focus on regulating the space and ensuring transparency. However, Jalan sees no need for crypto without regulation.
Meanwhile, RBI has stated that digital coins are a concern; permitting them can challenge the financial sector and macroeconomic stability. Jalan added that the central bank needs to regulate the market and reveal all crypto activities to the public. He trusts the crypto space should guarantee transparency similar to RBI presenting the public with data on various aces, including money the government introduced in borrowings, among other things.
Meanwhile, governments have different approaches to categorizing cryptocurrencies. Some nations like El Salvador adopted BTC as legal tender, while China imposed stiffer rules on crypto. Duvvuri Subbarao, another former Reserve Bank of India governor, stated that the central bank might lose control over inflation management and money supply with crypto adoption. Also, Subbarao highlighted that India’s CBDCs might not be sturdy with the available capital controls. He added that cryptocurrency might disrupt the nation’s monetary policy.
The crypto regulation bill aims at a facilitative framework for RBI’s official digital coin. Nevertheless, the bill seeks to ban all private cryptos, allowing few exclusions to endorse blockchain technology.
For now, the crypto market price drops amid negative sentiments. Bitcoin failed to surge beyond $50,000 and dipped towards $48,245. That has market players waiting for another bullish run in the coming year.
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