DeFi, according to India’s central bank governor Shaktikanta Das, is tough to monitor due to its anonymity. Das made the statements at a business event, where he also called for global collaboration.
The Governor of India’s Reserve Bank of India, Shaktikanta Das, issued a remark on the DeFi market, stating that it creates a challenge due to its anonymity. The governor of the central bank was speaking at the BFSI summit in Mumbai, and he stated that traditional techniques would be ineffective.
Das has expressed his disdain for crypto assets, claiming that they represent hazards and threats to the existing financial system. He stated in his address:
“DeFi poses unique challenge to regulators, as its anonymity, lack of a centralized governance body, and legal uncertainties can make the traditional approach to regulation ineffective.”
The RBI has also stated its concerns about regulating the crypto area, having previously discussed the complexity of regulating such a novel asset class. Currently, the asset class is permitted to exist, but it is heavily taxed and is not regarded legal tender. The Indian government’s reforms have resulted in a significant decrease in crypto trading volumes.
The cryptocurrency taxes laws are merely the first step in the race to control crypto that the RBI and other regulatory organizations in the country are pursuing. Greater regulation is on the way, and India is waiting for more global agreement before enacting policies.
India has already stated that it seeks global coordination on cryptocurrency legislation. This is understandable given that crypto has no borders and that a successful system cannot be implemented unless governments collaborate. Other nations, such as the United States and the United Kingdom, are still in the early stages of developing comprehensive regulations, but this could assist India in making a decision.
During his address, Das also stated that the crypto market requires a “globally collaborated and regulated approach” as well as “inter-regulatory coordination to enable complete assessment.” In the near future, the RBI will also issue a guidance on digital termination.
Meanwhile, India is developing its central bank digital currency (CBDC), which it hopes to leverage in a technologically advanced country. At the present, India appears content with allowing crypto to operate, but will not tolerate any acts that jeopardize consumer protection or AML rules.
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