The Indian government’s chief economic advisor warned about innovations like crypto and decentralized finance (defi) in the absence of regulation.” He opined that “we may not be fully aware of or understand the kind of power we are unleashing ourselves.
The Indian government’s chief economic advisor is skeptical
of crypto, defi, and decentralization.
The Chief Economic Advisor (CEA) to the Indian government, V. Anantha Nageswaran, reportedly warned about the dangers of crypto and the risks posed by its lack of regulation at an Assocham event on Thursday. Referring to cryptocurrencies, he was quoted by local media as saying.
Increased decentralization and the absence of watchdogs and centralized regulators also means that there is a world of Caribbean pirates and a “winner takes all” world in that you can really take everything from someone.
The government’s economic advisor explained that he agreed with Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar on crypto and decentralized finance (defi.) RBI officials explained that there is now a regulatory ruling regarding crypto and defi rather than true financial innovation. They warned that there appears to be.
Referring to defi, Nageswaran opined.
In my opinion, it is considered an innovation, but I would like to reserve judgment on whether it is truly innovative, truly disruptive in a good way, or something we will come to regret.
As to whether cryptocurrencies could replace fiat money, the economic advisor stressed that they “have to fulfill many objectives.” He elaborated.” It must be a store of value, it must be widely accepted, it must be a unit of account … In all these cases, new “innovations” such as crypto and defi have not yet passed the test.”
Nageswaran concludes.
So I wouldn’t get very excited by them, sometimes we may not be fully aware or understand the kind of power we are freeing ourselves from.
“I would be somewhat cautious about welcoming some of the disruptions based on fintech, such as defi and crypto,” he noted.
The Indian government is currently working on a crypto policy for the country. The Finance Ministry is in discussions with the International Monetary Fund (IMF) and the World Bank on crypto regulations. Last week, the Securities and Exchange Board of India (SEBI) said that the decentralized nature of crypto makes regulation difficult.
Meanwhile, India’s central bank remains skeptical of crypto. On Friday, RBI Governor Shaktikanta Das warned investors against trading in cryptocurrencies, reiterating that they “pose a significant risk to financial stability.”
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