India Applies Strategic Approach To Crypto Following FTX Collapse
India’s Finance Minister Nirmala Sitharaman has presented the Economic Survey 2022-2023, which outlines the country’s strategic approach to cryptocurrency following the recent crisis at FTX.
The report states that the Indian government is concerned about the potential for cryptocurrency to be used for illegal activities.
Heightened Crypto Surveillance In India
The FTX crisis has led to open discussions regarding the regulation of cryptocurrency in India.
The government has been disturbed with the question of how to balance its need to promote innovation with its duty to protect its citizens from financial danger.
In light of the FTX collapse, the government has decided to take a cautious approach towards cryptocurrency.
The Economic Survey highlights various measures the government intends to take to mitigate the risks associated with cryptocurrency.
The government will enhance its surveillance capabilities to detect and prevent illegal activities, which includes use of advanced technologies such as artificial intelligence to identify suspicious activity.
The government also plans to increase its efforts to orientate the public about the risks associated with cryptocurrency.
This will include a public awareness campaign that provides information about the dangers involved in investing in cryptocurrency and the steps that people can take to protect themselves.
The government will also consider implementing strict regulations to govern the use of cryptocurrency.
This will include measures such as requiring exchanges to undertake know-your-customer (KYC) and anti-money laundering (AML) procedures, and imposing punishment on those that fail to do so.
The government will team up with international organizations, such as the Financial Action Task Force (FATF), to ensure that its rules are in accordance with international best practices.
This will ensure that India remains a safe haven to invest in cryptocurrency and will help to prevent cross-border illegal activities.
India Weighing Both Risks And Benefits Of Crypto
The Indian government is aware of the fringe benefits of cryptocurrency, such as increased financial supremacy against inflation and the promotion of innovation.
However, it is also aware of the potential risks, such as increased financial crime and the instability in the financial sector.
As such, it has decided to take a cautious approach towards cryptocurrency.
This cautious approach is in line with the approach taken by many other countries around the world. Several countries have imposed strict regulations on cryptocurrency in order to protect their citizens from these dangers associated with using cryptocurrency.
It is pertinent to note that the Indian government has not yet made a final decision on the regulation of cryptocurrency.
The Economic Survey is an important first step, but it is only the beginning of a larger conversation about the future of cryptocurrency in India.
The government will continue to engage in round table discussions with stakeholders, including the crypto industry, financial authorities, and consumer protection organizations, in order to determine the best way forward.
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