Emerging countries may benefit from regulating crypto assets rather than imposing a complete ban, according to International Monetary Fund (IMF) chief economist Gita Gopinath.
“Regulating crypto assets and currencies is essential, especially for emerging and developing economies, as banning them may not work as crypto exchanges are located offshore, which makes it easier for an individual to trade in them despite the ban,” Gopinath said, delivering a lecture on ‘Global Recovery and Policy Challenges in 2022’ organised by National Council of Applied Economic Research (NCAER).
No individual country could solve this problem on its own given the complex cross-border transactions, she said. “There is a need for a global policy on it urgently.”
Gita Gopinath, however, cautioned that the adoption of crypto assets poses a challenge to emerging and developing economies as most of them have regulations around foreign transactions.
“Cryptos pose problems as usually emerging and developing economies have exchange rate controls, capital controls, and capital flow measures,” Gopinath said.
“Crypto assets and currencies can be used to evade those regulations,” she added.
Gita Gopinath’s comments came at a time when the Indian government is planning to get cabinet approval for its cryptocurrency bill.
The official Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 was likely to be introduced during the Winter Session of Parliament, but top government sources indicated that chances are slim.
