NEW DELHI: The Reserve Bank of India (RBI) has suggested a framework for international regulation of such Cryptocurrencies after observing the unrest in the market for crypto assets.
The central bank stated that "the turmoil in the crypto asset market highlights their intrinsic volatility and structural vulnerabilities, while their interconnectedness with the traditional financial system is increasing" in its report on financial stability, which was published on December 29, 2022.
The RBI has suggested that there should be consistency at the international level on regulatory and supervisory approaches. The guiding concept of these regulatory systems should be "same activity, same risk, same regulation." The framework suggests that authorities should have the proper authority, instruments, and resources to control, monitor, and oversee the local and international markets for crypto assets in proportion to the danger they pose to financial stability.
In addition, the RBI research has further recommended that comprehensive governance and adequate risk management frameworks be developed in order to address the risks to financial stability brought on by interconnection.
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