Finally, there’s some good news for the Indian Cryptocurrency ecosystem—and this one’s from a global financial body.
An inter-governmental body that makes recommendations about the health of the world economy has said that virtual currencies are not a threat.
Crypto Assets, not a threat- FSB
The observation was made by theFinancial Stability Board (FSB), which counts over 20 countries as its members, including the US, UK, China, and India. The assessment came to light after India’s central bank, the Reserve Bank of India (RBI), quoted the agency in a report released last week.
”The FSB has undertaken a review of the financial stability risks posed by the rapid growth of crypto-assets. Its initial assessment is that crypto-assets do not pose risks to global financial stability currently,” the RBI report said.
A Note of caution
Nevertheless, the central bank also added a note of caution as it has adopted a wait-and-watch policy towards crypto assets.
“The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become more widely used or interconnected with the core of the regulated financial system,” the RBI noted.
The FSB was established in 2009 by finance ministers and central bankers from G-20 nations in the aftermath of the global financial crisis. Even though the recommendations of the FSB are not legally binding on member countries, they are typically adhered to, so as to ensure that the international standards are maintained. Its latest observation on cryptocurrency, therefore, comes as a ray of hope for the battered global crypto-ecosystem.
Sinking prices and unfavourable regulations have hit the industry in several geographies, including India. Till now, neither India’s central bank nor prime minister Narendra Modi’s government has taken a favourable stance. Since July 2018, on the RBI’s behest, lenders have been banned from pursuing any banking relationship with the cryptocurrency exchanges and traders.
Meanwhile, the government has been studying virtual currencies for nearly two years now but hasn’t come out with any specific regulations on it, yet. Last week, the Indian parliament was also informed that the government is still studying the issue and has not even set a deadline for coming out with specific norms for the ecosystem.
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