As cryptocurrencies grow increasingly and prevalent as a payment method substitute for conventional methods, countries, and organizations across the globe are scrambling to figure out how to regulate and manage these new financial assets. This regulation is due to the increasing rate of cybercrimes and fraudulent activities ongoing in the space and also to protect investors.
As The Economic Times disclosed on the 20th of April, the body has shifted attention to India while noting that cryptocurrency regulation is a primary concern. Tobias Adrian, the IMF’s Financial Counselor, confirmed the report and stated at the annual International Monetary Fund conference that the agency’s assessment of India was “pretty favorable,” and he went on to explain why:
“I feel there are numerous prospects for development. The prospect of fresh growth prospects and new advances has piqued the interest of many people. Several countries are turning to crypto and this move is a good development for the industry.”
India Looks Closely At CBDCs
Adrian mentioned that “India is researching the use of CBDCs, which might be fairly crucial for financial literacy and growth. At the end of his speech, he said that resolving the existing regulatory difficulties in the financial and non-banking sectors was critical for the country’s development and economic growth.
The Danger Posed By “private cryptocurrency
Nirmala Sitharaman, the Indian minister of finance, has called for a national understanding of how to handle cryptocurrencies, highlighting the potential danger of private cryptos being employed for laundering money and terrorist financing.
This came up during her participation in a discussion panel held on the 19th of April, where she emphasized the need for legislation as the only answer to the issues that, in her perspective, no one nation can solve on its own.
She stated that:
“Regulation by technological means is the only solution. It must be very proficient that this method is at the forefront . And it is not realistic if one government believes it is equal to the task of dealing with the situation. It needs to be done on a broad scale.”
The managing director of IMF, Kristalina Georgieva, responded to her concerns by stating that the agency would enlarge its work on cryptocurrency in India, focusing specifically on cybersecurity threats, private virtual currency legislation, and the integration of CBDCs.
The IMF has issued a warning regarding cryptocurrencies after one of its latest assessments revealed that virtual currency adoption was stronger in corrupt governments with harsher capital controls. The group is also opposed to any prohibitions on cryptocurrencies and instead advocates for greater industry regulation.