Gita Gopinath, the IMF’s chief economist, has made an excellent case for regulating cryptocurrencies. Cryptocurrencies will always be a struggle to regulate because they exist on offshore exchanges, she says.
Gopinath proposed a global policy and coordinated action for regulating cryptocurrencies.
“Cryptocurrencies are a particular problem for developing nations,” she said, speaking at an event hosted by the National Council of Applied Economic Research (NCAER) on Wednesday.
The Indian government is working on a bill that would address the problems caused by cryptocurrencies that are not under its regulatory purview. There are currently no restrictions on the usage of cryptocurrencies in India.
Given the complicated cross-border transactions, no single country could solve this (cryptocurrencies) problem alone, according to the IMF’s chief economist.
Because many of these cryptocurrency exchanges are located offshore, they aren’t subjected to the regulations of any one nation. As a result, there is a pressing need for a global policy on this topic right now, she added.
When asked about India’s fiscal and monetary policy, Gita Gopinath said that the country’s core inflation is currently slightly above 6 percent, which means that making policy while acknowledging that the economy has not yet recovered is a significant problem.
The Wholesale Price Index (WPI)-based inflation rate for November rose to a 12-year peak of 14.23 percent, the highest since April 2005. The consumer price index (CPI) rose to a three-month high of 4.91 percent last month.
According to her, the global recovery lost momentum in the third quarter, owing to the resurgence of the pandemic.
On November 24, the World Health Organization (WHO) was informed of the B.1.1.529 or Omicron variant, which was first detected in South Africa on November 24.
She stated that one of the good outcomes was that, despite having been prevalent for almost two years, the pandemic cannot be compared to the Great Depression of the early 20th century.