In its annual flagship Economic Survey, India’s Finance Ministry emphasized the need for “a uniform approach to regulating the crypto ecosystem.”
According to the Indian government, “Crypto assets are self-referential instruments and do not strictly pass the standard of being a financial asset because it has no inherent cashflows associated to it.”
Economic Survey from the Finance Ministry Contains Crypto This year’s Economic Survey 2022–23 was given in Parliament on Tuesday by India’s Finance Minister, Nirmala Sitharaman.
An annual flagship report from the Ministry of Finance, the Economic Survey, describes how the Indian economy performed in the previous fiscal year and provides an economic projection for the current fiscal year.
The Economic Survey underscores the “necessity of an uniform approach to governing the crypto ecosystem” by include cryptocurrencies for the first time this year.
Because they lack any intrinsic cashflows, crypto assets do not strictly meet the criteria for being considered financial assets. Instead, they are self-referential instruments.
India`s central bank, the Reserve Bank of India (RBI), has also repeatedly warned that crypto has no intrinsic value, adding that they pose risks to the country`s financial stability
Additionally, according to the Economic Survey, “U.S. regulators have excluded bitcoin, ether, and several other crypto assets as securities.” Gary Gensler, the head of the Securities and Exchange Commission (SEC) in the United States, has acknowledged that bitcoin is a commodity but declined to comment on ether.
The Ministry of Finance’s Economic Survey then makes reference to a joint statement released on January 3 by the U.S. Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), in which the three organizations expressed their concerns about the threats that cryptocurrencies pose to the banking system.
A unified strategy to the regulation of these volatile assets is required due to the geographically widespread character of the crypto ecosystem.
The document then goes on to cover the present regulatory frameworks used throughout the world, including those in the United Kingdom, Albania, Nigeria, Japan, Switzerland, and the European Union.
In light of this, the study concludes that “there exist regulatory gaps at each stage when crypto assets are issued, transferred, exchanged, or stored by non-bank companies.”
The Indian government intends to address crypto regulation with the G20 countries in order to create a technology-driven regulatory framework for crypto assets, the finance minister earlier stated.