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India’s Chief Economic Advisor (CEA), Anantha Nageswaran, has called on regulators to avoid obstructing advancements in the crypto and gaming industries.
During his address at the 2024 Global Economic Policy Forum on Wednesday, Nageswaran highlighted the necessity of regulatory clarity. He also advocated for a balance between promoting innovation and considering social implications.
“In a nation with low per-capita income and financial illiteracy, not every innovation should be embraced without scrutiny. A social cost-benefit analysis of innovations like Crypto and online gaming is essential.”
He recognized the difficulties associated with financial literacy in low-income countries and the importance of assessing new sectors.
Moreover, Nageswaran urged regulators to ensure their actions are driven by well-defined objectives.
“Regulators must clarify the rationale behind the introduction of specific regulations,” he stated, adding that the proposal should include the information and objectives it aims to fulfill.
This kind of transparent framework would enhance accountability and trust, he noted.
Additionally, Nageswaran warned regulators to be responsible for their “unelected power,” which refers to the delegation of authority to independent government bodies.
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“Regulators must be mindful of their unelected powers and should be held accountable. Transparency is crucial, along with information sharing by Regulators.”
His remarks come as India grapples with crypto regulations, including a 30% tax on crypto earnings. Nonetheless, several prominent crypto figures in India are optimistic about the development of a favorable crypto policy framework.
Earlier this year, Sumit Gupta, Co-Founder of one of India’s leading crypto exchanges CoinDCX, mentioned to CryptoNews that “if viewed positively, [cryptos] will create a level playing field for domestic exchanges.”
Nageswaran Urges Regulators to Differentiate Between Financial and Non-Financial Regulations
As reported by PTI, Nageswaran stressed the importance of distinguishing between regulations pertaining to the financial sector and those related to the non-financial sector. This differentiation will help reduce excessive risk and competition instability.
“We need to differentiate between regulations concerning the financial sector and those related to the non-financial sector of the economy.”
He further stated that in the non-financial sector, market dynamics or competition will address the regulator’s actions. Conversely, in the financial sector, regulators often tend to impose excessive regulations.
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