The International Monetary Fund (IMF) has played a crucial role in determining the global approach to this issue as India’s G20 presidency focuses on regulating crypto assets, among other important things. The IMF’s Deputy Managing Director Gita Gopinath went into great depth about this project in an exclusive chat with Business Today’s Executive Director Rahul Kanwal.
Gopinath began by underlining the importance of this collaboration and emphasising that it has macro-financial implications in addition to regulatory ones. The Financial Stability Board and the IMF have teamed up for the first time to handle the regulation of crypto assets completely, realising the necessity for an all-encompassing viewpoint. Finding required policy changes that strike a balance between regulation and financial stability is the main goal.
One fundamental rule in relation to monetary matters is to avoid legalising the usage of digital assets like Bitcoin as legal money because doing so would undermine monetary sovereignty. With an emphasis on treating similar operations and risks uniformly, the guidelines recommend licencing and registration for crypto asset issuers in order to promote financial stability.
Gopinath emphasised that although a clear set of principles had been reached, more work has to be done to create particular laws. She noted that it’s significant that “there is no mention of outright banning cryptocurrencies, demonstrating a global consensus against such steps.
Gopinath, however, voiced concern over the various stances that various nations have adopted in regards to crypto asset legislation. They emphasised the basic concepts that the majority of nations have agreed upon while recognising the necessity to modify rules to particular conditions.
“We demand that the Crypto-Asset Reporting Framework (CARF) and the CRS [Common Reporting Standard] be amended immediately. According to a consensus statement signed by G20 leaders, “We request the Global Forum on Transparency and Exchange of Information for Tax Purposes to identify an appropriate and coordinated timeline to commence exchanges by relevant jurisdictions.”
When asked when these concepts will be put into practise, Gopinath said that with better data and openness, the cryptocurrency market would stop acting like the “Wild West” that it has been. Depending on whether crypto assets are used for payments or speculative investments, differentiating will take place.
On the Indian economy, Gita Gopinath
Gopinath stressed the importance of India as a global economic engine when discussing the Indian economy, forecasting above 6% growth for the current fiscal year. Driving forces have been public investment and resilient consumption expenditure. To maintain rapid development and entice private investment, fundamental improvements are necessary.
By 2027–2028, India’s economy will be the third largest in the world. According to her, India will contribute 15% of the world’s growth this year and will play a significant role in future economic growth.
Gopinath emphasised the need for changes to state-level governance, the labour market, business accessibility, the standard of education, and the engagement of women in the workforce. She continued, “These reforms are essential to accelerating India’s growth trajectory.”
There is no cause to question the veracity of the numbers, Gopinath said in response to questions regarding India’s economic growth statistics. In order to make judgements, the IMF uses a variety of data sources and high-frequency data.