In Brief:
- IMF Chief Economist Gita Gopinath suggested that although regulating crypto assets and currencies is essential, banning them would not work.
- She also said that cryptocurrencies were posing a challenge for the emerging markets as it is more attractive to adopt these in developing economies.
- She called for an urgent global policy to regulate cryptos.
Amid the constant speculations that have surrounded the ‘Crypto Bill’ in the Indian purview, IMF Chief Economist Gita Gopinath has a piece of advice about the same.
On the bigger question of banning cryptos or regulating cryptos, IMF Chief Economist Gita Gopinath suggested that although regulating crypto assets and currencies is essential (particularly for emerging and developing economies), banning them would not work. The reason it would not work is because crypto exchanges are located offshore it is easier for an individual to trade in them despite the ban.
At an event organised by National Council of Applied Economic Research (NCAER) on Wednesday, she spoke on cryptocurrencies posing a challenge for the emerging markets as it is “more attractive to adopt these in developing economies”.
Gopinath said, “Cryptos pose problems as usually emerging developing economies have exchange rate controls, capital controls, and capital flow measures”. She added, “Crypto assets and currencies can be used to evade those regulations.”
Calling for an urgent global policy, she explained that no individual country can solve this problem as it also includes complex cross-border transactions.
When it comes to cryptos, the Indian policy makers still seem to be undecided. Even yesterday, the much-awaited Cryptocurrency Bill was not presented in the parliaments for discussion as the government is still working on finalising the bill.
