The International Monetary Fund’s chief economist, Gita Gopinath recently spoke at an event held by the National Council of Applied Economic Research (NCAER) urging emerging economies to create a global policy on cryptocurrencies rather than banning them.
“I think cryptocurrencies are a particular challenge for emerging markets. It would seem that cryptocurrencies are more attractive for emerging markets compared to developed economies. However, emerging markets have exchange rate controls, capital flow controls, and cryptocurrencies can impact that,” she noted during the event.
Gopinath, who is primed to become Deputy Managing Director of the IMF also spoke about the importance of creating a fiscal policy that “accommodates” cryptocurrency:
“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. Our view is that India should maintain an accommodating fiscal policy for a few quarters, and afterwards unwind, gradually. Similarly, monetary policy should be accommodative, but like all other central banks, the Reserve Bank needs to keep a close eye on inflation,” Gopinath said.
Unlike global central banks that have cautioned against cryptocurrencies, the IMF has shown indications of support for the crypto industry. The recent speech by Gopinath is encouraging for the sector, particularly at a time when India’s crypto bill is awaiting ratification in parliament. Fear circulated at the time of the bill’s initial announcement, that cryptocurrencies would be banned. However, it later emerged that the bill had been worded improperly, and the language had been carried over from a previous bill.
India’s crypto bill is expected to be tabled for the new year, which will clarify crypto regulations in the nation.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
