A senior spokesperson of the International Monetary Fund (IMF) highlighted India’s preference to regulate crypto assets and ranked this issue as a medium-term priority.
Tobias Adrian, the Financial Counselor and Director of IMF’s Monetary and Capital Market Department, explained IMF’s point of view on India as “a fairly positive one” and stated:
I think there are many opportunities and growth (in India is coming back). There’s a recovery. There’s a lot of excitement around new growth opportunities, new developments.
Regulation Of Crypto Assets
According to Adrian, “regulating crypto assets is certainly high on the agenda,” and this is part of the primary structural issues of India to be addressed in the medium term. Therefore, India will undoubtedly search for a solution to those issues in the near future period.
IMF official Adrian said;
That is something that is done globally. Within the financial stability board, we are trying to come up with global standards for crypto asset regulations. I think that’s important for India to also adopt. Of course, I know that India has changed the taxation of crypto assets and that’s a welcome move.
Policy Evolution In Digital Currency
The IMF official pointed out that India’s central bank is working out digital currencies to include in the financial system to boost economic growth. IMF is keenly looking after the developments and warmly welcomes those policy evolutions.
Adrian briefed on the importance of financial systems for economic growth, and at the same time, regulatory bodies in the banking and non-banking system are also highly essential.
Finally, I would argue that being part of the global financial system and being part of global trade is very beneficial to India. India can export many products, it can import products, it can raise capital externally, it can fund projects externally as well, there are Indian investments all over the world.
Adrian has also highlighted risks associated with increased state debts, especially government applied expansion in financial policies due to pandemic Covid-19.
As per remarks of Ranjit Singh, working as Assistant Director of the Monetary and Capital Markets Department, the Indian state debt situation is satisfactory and can be controlled easily.
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According to the economic times, banks’ volume in the Indian state debt is 29%, which is average above compared to the emerging market figure of 16%. Indian public debt to GDP ratio stands at almost 87%.
Kristalina Georgieva, managing director of IMF, stated that the organization would increase its work on crypto in the country and stressed the necessity of private digital currency regulation, compatibility of CBDCs, and cyber security risks.