An approach that can help mitigate key policy risks from cryptocurrency
India Wallet is envisaged as a de-duplicated unique wallet every citizen can open
The government has reiterated its position of regulating the cryptocurrency industry strictly in a manner that does leave room for innovation. This is not an easy balance to achieve, however, nor does India have many models to look up to. China recently enforced a full ban and is now struggling with compliance as citizens shift to stealth mining. In general, the bouquet of risks India faces—investor protection, illicit activity, capital controls, financial stability, taxation—cannot be managed the same as the US, Europe and other leading regions primarily because of a different monetary policy framework, different financial regulation framework and a plethora of small investors with low financial literacy. The policy process has been slow due to a lack of options on the table to tackle all these risks.