The International Monetary Fund (IMF) in the form of Gita Gopinath recommends that the Indian government should move away from the Crypto Ban and rather try to create regulations for the safe use of cryptocurrencies.
She said, “Regulation is absolutely important for this sector. If people are using this as an investment asset, then the rules which are there for other investment classes should apply here as well.”
The IMF apparently sees cryptocurrencies as an unstoppable disruptive technology. Since they are probably unstoppable even if governments try to ban them, currency guardians can only go on the regulatory track. Therefore, the call for cryptocurrency regulation from the IMF comes as less of a surprise. However, crypto investors and blockchain users should ask themselves why a centralized regulatory body is needed in a decentralized system? The security of the system, for example, Bitcoin, rests on the shoulders of the many computing units. Or are the governmental institutions only interested in getting a foot in the door to avoid becoming obsolete?
The crypto issue continues to be a hot potato in India as many big players like the Reserve Bank of India and politicians are against cryptocurrencies. Obviously, these two parties must be against any decentralized type of currency as it is a kind of replacement to the current centralized system. Central banks and governments do not want to lose their monopoly position in means of payment and fight cryptocurrencies with all means.
On the other hand, there are diverse unicorns in the Indian market that see their business in danger as a result. Moreover, about 20 million Indians hold investments in this sector worth 150-200 billion rupees. Naturally, higher instances take notice when such large sums are shifted without passing through their hands. Therefore, they are inevitably calling for regulations.