Despite huge challenges, India has a great opportunity to show its ability in regulating digital assets. Examine (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· Digitisation is expected to transform business and the global economy, especially with the lifestyle changes ushered in by the pandemic.
· Digital assets, be in cryptocurrencies, non-fungible tokens (NFTs), gaming, metaverse, loyalty points, wallets, etc., have undergone a sea change in the last few years, with many new use-cases.
· Policymakers would have to be more principle based, less prescriptive, keeping customer protection and resultant systemic risks.
· It recognises the threats of global financial stability, illicit finance and national security risks, and consumer, investor and business interests involved with digital assets.
· Regulators would have to visualise the far-reaching use of technology in the regulated services to first understand use-cases and attendant risks, and then regulate the digital revolution underway.
· Conventional means to rule-making may defy regulation of digital assets and get constrained by regulatory silos, turfs, domain and legal limitations.
· CBDCs can be the first (and not the only) natural response to regulated digital assets.
· India is on the cusp never before has a topic seen such interest, on this sustained a basis. The policy-making must follow a detailed study of the risks, opportunities and challenges posed by the current digital assets revolution. This is India’s moment to show leadership in regulation and promote innovation.
