Cryptographic assets have been included in the Indian Economic Survey 2022-23 for the first first time, which is significant in that it highlights the need for a uniform method to manage the cryptocurrency ecosystem.
The Economic Survey 2023 was presented by Finance Minister Nirmala Sitharaman in Parliament yesterday, commencing the Union Budget session.
The survey mentions the FTX collapse and how it affected the industry. “The recent collapse of the crypto exchange FTX and the ensuing sell-off in the crypto markets have placed a spotlight on the vulnerabilities in the crypto ecosystem,” the document notes.
It further adds that crypto assets are self-referential instruments and do not strictly pass the test of being a financial asset because they have no intrinsic cash flows attached to them.
“The geographically pervasive nature of the crypto ecosystem necessitates a common approach to the regulation of these volatile instruments,” it noted.
According to the survey, the crypto asset ecosystem’s volatility has issues with its brittle backing and governance, as well as its growing complexity and lack of transparency.
“Therefore, Global standards need to be comprehensive and consistent; regulatory responses must be based on standard taxonomies, reliable data to address contagion effects, and flexible enough to be adjusted in the future based on market developments and future international standards,” the survey highlighted.
An international approach to regulating digital assets is currently being discussed in forums like the OECD and the G20.
Meanwhile, the crypto community in India is happy with the survey as there are no calls to ban crypto yet, but just the focus on regulation.
CoinSwitch co-founder Ashish Singhal tweeted “As EcoSurvey puts it, there is a need for a common approach to regulating the crypto ecosystem. Our hope is India too will move in this direction and not take any regressive measures on crypto.”
“Regulatory void and lack of accountability tend to enable bad actors, and leave everyday users and investors with little to no legal recourse. With India’s G20 presidency, we hope 2023 would finally be the year to establish a framework for crypto,” he added.
Compiled by Coinbold