Former Reserve Bank of India (RBI) governor Raghuram Rajan on Tuesday said the government should consider adopting an agnostic attitude when it comes to trading in cryptocurrency.
Responding to a question on the regulation of cryptocurrencies in India, Rajan told India Today in an exclusive interview, “At this point, an agnostic attitude is reasonable where we collect information and if we see that trading in any one asset is going beyond what we think are reasonable norms and many people are piling into it, we should offer public warnings… that this is not better or regulated by the government and something you can lose money on”
He also expressed,”We need to be very careful in either saying that whether this (crypto) is a viable investment or you should invest in it or before we know it, sort of ruling it out because then you might rule out certain technologies which we can never use.”
During the interview, Rajan also expressed that most of the existing cryptocurrencies will soon perish.
On the question of whether there needs to be some regulation or ban on crypto, Rajan said, “I think there needs to be more information, I think regulators need to understand better what they are dealing with. I think what they can do prevent outright fraud but I think it is very hard for regulator to pronounce the value of crypto assets or cryptocurrencies…” He also added that regulators need to understand this better and get the capabilities and acquire knowledge before taking a call on the nature of legislation.
Rajan also added that they (regulators) “need to be very careful about blanket ban because that will drive the whole process underground and it is not clear whether they have the ability to deal with it underground.”
Earlier, Finance Minister Nirmala Sitharaman in Parliament had clarified that the crypto bill listed in Lok Sabha is an old Bill, and that a new cryptocurrency bill will be presented in front of the Union Cabinet soon.
Prime Minister Narendra Modi had last month chaired a comprehensive meeting on the way forward for cryptocurrency and related issues which was also an outcome of a consultative process with RBI, Finance Ministry, Home Ministry having done an elaborate exercise on it in which they consulted experts from across the country and the world.