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India’s Chief Economic Advisor (CEA), Anantha Nageswaran, has urged regulators not to hinder innovations in the crypto and gaming sector.
Speaking at the 2024 Global Economic Policy Forum on Wednesday, Nageswaran stressed the importance of regulatory transparency. He also advocated to strike a balance between fostering innovation and addressing social costs.
“Regulators must explain why a particular regulation is being introduced,” he said, adding that the proposal must contain information and goals it seeks to achieve.
He also acknowledged the challenges posed by financial literacy in low-income nations and the need to evaluate emerging sectors.
“In a country with low per-capita income and financial illiteracy, not every innovation needs to be encouraged without any questioning. You have to have a social cost-benefit analysis of innovations such as Crypto and online gaming.”
“We do need to make a distinction between regulation with respect to financial sector and regulation with respect to non-financial sector of the economy.”
According to a PTI report, Nageswaran emphasized the need to differentiate between financial and non-financial sector related regulations. This will mitigate the excessive risk and the competition instability.
He added that in the non-financial sector, market forces or competition will take care of the regulator’s actions. However, in the financial sector, regulators tend to lean towards excessive regulations.