India’s central bank, the Reserve Bank of India (RBI), released its Financial Stability Report (FSR) for December on 29th Dec. The 172-page report includes discussions on crypto assets, CBDCs, and DeFi.
“Regulating new technology and business models after they have grown to a systemic level is challenging,” the RBI report states. “To promote responsible innovation and to mitigate financial stability risks in crypto ecosystem, it is vital for policymakers to design an appropriate policy approach.”
In this context, one of India’s G20 priorities is to develop a framework for global regulation, including the prohibition of unbacked crypto assets, stablecoins, and defi.
The central bank identified “turbulence in the crypto asset market” as one of the “major risks that could jeopardize global financial stability.” The RBI also stated that cryptocurrency assets are highly volatile, have “high correlations with equities,” and have fallen as inflation has risen.
(Reporting by Shikha Singh, Editing by Laxmikant Khanvilkar)
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