IMF's Gita Gopinath suggests regulation, and not ban, for cryptocurrency, seeks global policy

IMF Chief Economist Gita Gopinath (Image: AFP)

Emerging economies should regulate cryptocurrency, instead of banning it, International Monetary Fund chief economist Gita Gopinath said on December 15, and called for a global policy.

“There are challenges to banning it whether you can end up with truly banning crypto because many exchanges are offshore and they are not subject to regulations of a particular country,” Gopinath said, addressing an event organised by National Council of Applied Economic Research (NCAER).

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Pitching for a global policy, Gopinath said “no individual country can solve this problem on their own” because of the ease with which cryptocurrency transactions can be done cross border. “There is a need for a global policy on it urgently,” she said.

In an interview to CNBC TV-18, the economist further said that cryptocurrency is not a "global threat, as of now."

On surging cases of Omicron variant, Gopinath said, "It is worrying to see high level of infection rate. Omicron is expected to be the dominant version over the next one month. It is worrying to see high level of infection rate. Need the whole world to get vaccinated or you will keep getting new variants of COVID-19."

In India, the much-awaited Cryptocurrency Bill is unlikely to be tabled in the ongoing Winter Session of Parliament. The Bill, which was listed in the government’s legislative business of the Winter Session, seeks to “create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India”.

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It also seeks to prohibit all private cryptocurrencies in India. However, it “allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses”, according to the Bill listed for introduction on the Lok Sabha website.

Gopinath also called on Prime Minister Narendra Modi on December 15.

“Chief Economist of the IMF, @GitaGopinath called on PM @narendramodi,” the Prime Minister’s Office (PMO) tweeted along with a couple of photographs from the meeting.

Gopinath was recently promoted as IMF’s First Deputy Managing Director. She is set to replace Geoffrey Okamoto who plans to leave the Fund early next year.