India’s chief economic advisor calls for regulation that doesn’t hinder crypto innovation

India’s chief economic advisor wants regulators to foster innovation in the cryptocurrency sector while upholding transparency and accountability.

Speaking at the Global Economic Policy Forum 2024, V. Anantha Nageswaran, the Chief Economic Advisor of the Ministry of Finance, said regulators “must not stand in the way of so-called innovations in crypto and Bitcoin.”

He emphasized the need to balance innovation with societal needs, pointing out that financial illiteracy is a major challenge in India and even in developed countries.

“We need to ensure that the criteria set for regulators do not obstruct innovation,” he added.

Further, Nageswaran stressed the importance of transparency, highlighting that regulators should actively share information and ensure their actions align with societal goals. According to him, “the same principles of transparency and social cost-benefit” that apply to financial innovations must also apply to regulators themselves. 

By adhering to these standards and recognizing the limits of their unelected powers, he argued, regulators can support progress in fast-evolving sectors like cryptocurrency while safeguarding public interests.

Nageswaran’s comments come amid calls for regulatory clarity in the nation. Regulators in India have been relatively quiet about their stance on cryptocurrencies, leaving the sector sector grappling with uncertainty over policies.

A policy paper that was supposed to clarify crypto’s standing has been repeatedly delayed as the nation has diverted its resources toward developing and testing its central bank digital currency, the digital rupee.

The Reserve Bank of India, which has historically opposed cryptocurrencies, has maintained a cautious stance, with some reports claiming the regulator favors banning private cryptocurrencies due to concerns over financial stability and risks to investors.

Despite the challenging conditions, where investors also face a 30% tax on crypto gains, the most populous nation has witnessed a surge in crypto adoption. It holds the top spot in Chainalysis’s latest Global Crypto Adoption Index.

Recently, Jetking Infotrain, a prominent IT training company in the nation, made history after it became the first publicly listed business in India to add Bitcoin to its corporate treasury.