International regulation needed for crypto activities, says RBI

New Delhi, Jan 2 :: Noting that there is turmoil in crypto assets market, the Reserve Bank of India (RBI) has suggested a framework for international regulation of such crypto activities.
In it’s financial stability report, which released on December 29, 2022, the central bank has said that “the turmoil in crypto assets market highlights their intrinsic volatility and structural vulnerabilities, whereas their interconnectedness with the traditional financial system is increasing”.
The central bank has suggested that there should be consistency at the international level on regulatory and supervisory approaches.
These regulatory approaches should be grounded in the principle of “same activity, same risk, same regulation” approach.
The framework proposes that authorities should have appropriate powers, tools and resources to regulate, supervise, and oversee crypto assets activities and markets, both domestically and internationally, proportionate to the financial stability risk they pose. In addition to this, the RBI report has further suggested that there is a need to prepare comprehensive governance and effective risk management frameworks, which address financial stability risks that arise from interconnectedness.