Crypto Legislation Can Be Effective Only After Global Collaboration, Risk Evaluation: Pankaj Chaudhary

"Crypto assets are by definition borderless and require international collaboration to prevent regulatory arbitrage," said the minister of State for finance.

The policy related to crypto assets and its ecosystem is with the Finance Ministry and any legislation on it would be effective only through international collaboration after proper risk evaluation, the Parliament was told on Friday.

"Crypto assets are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation on the subject can be effective only with significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards," Minister of State for Finance Pankaj Chaudhary told the Lok Sabha in a written reply.

He was responding to a question from BJD member Bhartruhari Mahtab on the current status of the cryptocurrency bill, which was due to be tabled during the 2021 Winter session of the Parliament and by when would it be tabled and opened for public inputs.

Mahtab had also sought to know which department would regulate cryptocurrency and crypto token and regulate other virtual digital assets other than cryptocurrency such as NFT and decentralised applications.

Meanwhile Reserve Bank of India (RBI) governor Shaktikanta Das said at a recent event that if private cryptocurrencies are allowed to grow, it will be the cause of the next major financial crisis.

“Change in value of any so-called product is the function of the market, but unlike any other asset, our main concern about crypto is that it doesn’t have any underlying [value] whatsoever,” Das said. “As a term, cryptocurrency is a fashionable way of describing what is otherwise a 100 percent speculative activity.” 

Das also noted that the latest FTX meltdown has caused a wipeout of nearly $40 billion from the market. “After the episode of FTX, I don’t think we need to say anything more.”

(With inputs from IANS)

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