India Resists Comprehensive Cryptocurrency Framework, Citing Systemic Risk Concerns

According to a report by Golden Finance, a government document reveals that India prefers not to establish comprehensive legislation to regulate domestic cryptocurrencies, opting instead for partial regulation due to concerns that integrating digital assets into the mainstream financial system could trigger systemic risks. The document cites the perspective of the Reserve Bank of India, stating that effectively controlling cryptocurrency risks through regulation would be extremely challenging. A document prepared by the government this month points out that regulating cryptocurrencies in India would grant them "legitimacy" and "could lead to systemic risks within the industry." In contrast, while a complete ban could address the "worrisome" risks posed by speculative cryptocurrency assets, the document adds that such an approach would fail to address peer-to-peer transfers or transactions on decentralized exchanges.