Like other developed countries, India has taken an initially cautious approach to crypto-assets. However, many countries have now advanced to considering crypto a digital asset rather than a currency, establishing ways to regulate this new class of digital asset. With this approach, India will capitalize on the crypto industry’s massive potential. It can become a home to blockchain innovations that could impact the Indian economy similar to IT services and the Internet. This will allow Indians to participate in promising new wealth creation opportunities.
Reserve Bank Of India(RBI) has reiterated several risks associated with crypto assets, including lack of backing by a tangible asset and threat of market manipulation (with consumer protection implications). India has dealt with similar novel technologies (financial and otherwise) exceptionally and established thoughtful regulations for such issues. Now it can adopt a similar approach for crypto as an example for many other regions.
A five-point framework has been envisaged to regulate the industry, mitigating these risks while fostering innovation. The five-point framework recommends regulations to define, introduce, enable, allow, and encourage necessary checks and balances for the optimal exploration of crypto’s potential, potentially leading to enhanced adoption.
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