Hello dear readers, this post serves to highlight the proposal for the regulation of cryptocurrencies that is being presented by the Central Bank of India, the monetary entity thinks about the possibility that the cryptocurrency ecosystem may implode.
After assuming the presidency of the G20, India published this Thursday, December 29, the Financial Stability Report. There it advocates a global regulatory framework for bitcoin and cryptocurrencies, which could include the possibility of banning unsupported cryptocurrencies and decentralized finance (DeFi) .
In the report, the Reserve Bank of India (RBI) notes that although the cryptocurrency market is volatile, it has not posed a major risk to the formal financial system. However, the regulator warns that accumulated experience suggests that cryptocurrencies form an unstable ecosystem and there is growing evidence that they are highly concentrated and interconnected.
To manage potential future risks to financial stability, and to protect consumers and investors, it is important to arrive at a common approach to cryptoassets, says the RBI.
In the report, the RBI identifies three regulatory options for cryptocurrencies, according to what has been established in various countries. A first option is to apply the same regulatory principles to cryptocurrencies that are in place for traditional financial intermediaries, the regulator says.
The second alternative presented is much more radical. "Ban cryptocurrencies, as their real-life use cases are minimal," says the report. Regarding this option, the document warns that there is a challenge coming from the different legal systems and individual rights of different countries, in the face of state powers. The challenge comes from the different treatments of cryptocurrencies that are contemplated in the regulatory frameworks in force in different countries.
SOURCES CONSULTED
RBI Report of the Reserve Bank of India (RBI). Link
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Giving the politicians the power to regulate is always taking it away from the people.
Hope something bad does not come out of these developments.
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