The Indian government’s chief economic adviser has warned about innovations like crypto and decentralized finance (defi) in the absence of regulation. “We may not be fully aware or comprehend the kind of forces we are unleashing ourselves,” he opined.
Indian Government’s Chief Economic Adviser Skeptical of Crypto, Defi, Decentralization
The Indian government’s chief economic adviser (CEA), V. Anantha Nageswaran, reportedly warned about the danger of crypto and the risks posed by its lack of regulation Thursday at an Assocham event. Local media quoted him as saying the following about cryptocurrency:
The more decentralized they become and the absence of a watchdog or a centralized regulatory authority also means that there is a world of Caribbean pirates or a world of ‘winner take all’ in terms of being able to really take it all from somebody else.
The government’s economic adviser explained that he agreed with Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar on crypto and decentralized finance (defi). A RBI official warned there is currently a regulatory arbitrage in crypto and defi, rather than genuine financial innovation.
Nageswaran made the following comment in reference to defi:
While I consider it innovation, I reserve judgment on whether or not it is actually innovative or disruptive.
Commenting on whether cryptocurrency could be an alternative to fiat currencies, the economic adviser stressed that it has “to satisfy many purposes.” He elaborated: “It has to be a store of value, it has to have widespread acceptability, and it has to be a unit of account … In all these cases the new ‘innovations’ such as crypto or defi are yet to pass the test.”
Nageswaran said:
So I wouldn’t be very excited by them because sometimes we may not be fully aware or comprehend the kind of forces we are unleashing ourselves.
“I would be somewhat guarded in my welcome of some of these fintech-based disruptions like defi and crypto etc,” he noted.
The Indian government is currently working on the country’s crypto policy. On crypto regulation, the finance ministry has met with representatives of the International Monetary Fund and World Bank. The Securities and Exchange Board of India, (SEBI), stated last week that crypto’s decentralized nature makes it difficult to regulate.
In the meantime, India’s central bank continues to be skeptical of cryptocurrency. On Friday, RBI Governor Shaktikanta Das cautioned investors against trading in cryptocurrencies, reiterating that they “pose huge risks to financial stability.”
What do you think about the comments by the Indian government’s chief economic adviser? Please leave your comments below.
Images CreditsShutterstock. Pixabay. Wiki Commons. Michael Vi
DisclaimerThis information is provided for educational purposes only. This article is not intended to be a solicitation or offer to sell or buy any product, service, or company. Bitcoin.com is not a provider of investment, tax, legal or accounting advice. The author and the company are not responsible for any loss or damage caused by the content or use of any goods, services, or information mentioned in the article.