India considering regulating or banning unbanked crypto, DeFi and stable coins

The Reserve Bank of India (RBI) is making concerted efforts globally to regulate or ban unbanked crypto assets, DeFi tokens, and stable coins, details from the recently unveiled Financial Stability Report performance,

RBI Suggestions on Crypto Regulations

The RBI highlighted three ways in which cryptocurrencies could potentially be regulated. As their first means, the central bank is considering banning crypto through various regulatory oversight mechanisms that would undermine all of its “real-world use cases”.

The central bank is also suggesting a framework for how countries can adopt a uniform risk management and regulatory approach that would subject all crypto exchanges to the same level. the inspection As traditional financial intermediaries and registered exchanges.

As their last option, the RBI cites the inherent volatility and risk of crypto which will eventually prevent it from expanding. Accordingly, they may leave this region to be “stuck” and become systematically irrelevant.

Although the RBI takes a negative view of the sector, they are also concerned about the potential risks should there be a rapid integration of crypto. traditional finance And this can have a cascading effect on the real economy.

RBI Governor Shaktikanta Das said that crypto could ignite a global financial crisis if its use is not controlled. In particular, Das is concerned about the architecture of crypto that is clearly designed to bypass existing financial systems. Its supporters, he says, do not believe in centralized monetary authority or regulation from government entities.

India’s position on crypto

India began taxing virtual currencies earlier this year, with a 30% capital gains tax and 1% transaction fee for any crypto transaction.

The crypto winter and the Indian government’s strict stance towards crypto has affected the liquidity in local exchanges. coindcxKuber, Coinus Witch, and many more.

On 20 December, the Government of India through its Finance Minister Pankaj ChowdharyUpdated and clarified Parliament on the Crypto Bill and Exchange Inquiry. Pankaj revealed that the widespread use of cryptocurrencies requires global cooperation to prevent regulatory arbitrage due to the borderless nature of crypto.

They noted that any legislation on the subject could only be effective with substantial international cooperation on risk and benefit assessment and the development of common classifications and standards.

Binance CEO Changpeng “CZ” Zhao described India as a “crypto unfriendly country” in an interview. He added that the exchange had specifically expressed concerns about India’s crypto taxation policies. Still, the CEO remained cautious, saying that refining the tax guidelines takes time.

Earlier this month, India took G20 Presidency for one year. The G20 comprises 19 countries from different continents and the European Union, which accounts for 85% of global gross domestic product (GDP).

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