Instead Of Banning, Emerging Economies Should Regulate Cryptocurrency: Gita Gopinath

Gopinath said there are challenges to banning cryptocurrency because many exchanges are offshore and they are not subject to regulations of a particular country

New Delhi: Chief economist of the International Monetary Fund (IMF), Gita Gopinath, who called on Prime Minister Narendra Modi on Wednesday, suggested that emerging economies of the world should regulate cryptocurrency, instead of banning it.

At an event organised by National Council of Applied Economic Research (NCAER), Gopinath said, “There are challenges to banning it whether you can end up with truly banning crypto because many exchanges are offshore and they are not subject to regulations of a particular country."

She also pitched for a global policy on digital currencies. The economist said “no individual country can solve this problem on their own” because of the ease with which cryptocurrency transactions can be done cross border. “There is a need for a global policy on it urgently,” she said.

In an interview to CNBC TV-18, Gopinath said that cryptocurrency is not a “global threat, as of now”.

She also expressed concern on the surging Omicron cases. “It is worrying to see high level of infection rate. Omicron is expected to be the dominant version over the next one month. It is worrying to see high level of infection rate. Need the whole world to get vaccinated or you will keep getting new variants of Covid-19,” she said.

India's much-awaited Bill on cryptocurrency is unlikely to be tabled in the ongoing winter session of Parliament. The Bill, which was listed in the government’s legislative business, seeks to “create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India".

The Bill, which seeks to prohibit all private cryptocurrencies in India, however, “allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses." according to the Lok Sabha website.

Gopinath will soon replace Geoffrey Okamoto, who will leave IMF early next year. Gita Gopinath, who has served as the IMF’s chief economist for three years, was scheduled to return to her academic position at Harvard University — where she is John Zwaanstra Professor of International Studies and Economics in January 2022.