India Resists Comprehensive Cryptocurrency Framework, Citing Concerns Over Systemic Risks

Jinse Finance reported that a government document shows India is inclined not to formulate comprehensive legislation to regulate domestic cryptocurrencies, but instead opts to maintain partial regulation due to concerns that integrating digital assets into the mainstream financial system could trigger systemic risks. The document cites the view of the Reserve Bank of India, stating that it would be extremely difficult to control the risks of cryptocurrencies through regulation in practice. The document prepared by the government this month points out that regulating cryptocurrencies in India would grant them "legitimacy" and "could lead to systemic risks in the industry." In contrast, although a complete ban could address the "worrying" risks posed by speculative crypto assets, the document adds that such an approach cannot address peer-to-peer transfers or transactions on decentralized exchanges.