Creating framework for unbacked Crypto assets' regulation a priority: RBI

economictimes.indiatimes.com:

crypto assets, stablecoins and DeFi (Decentralised Finance). «Under India's G20 presidency, one of the priorities is to create a framework for global regulation of unbacked crypto assets, stablecoins and DeFi, by considering both macroeconomic and regulatory perspectives to address the full range of risks posed by crypto assets, including risks specific to emerging markets and developed economies,» the RBI said in the latest edition of the Financial Stability Report. The turmoil in crypto markets throughout 2022, which led to the bankruptcy of the largest crypto trading platform, and the failure of two banks in March 2023 have highlighted the growing linkages between the traditional banking system and the crypto ecosystem. The central bank has said that while the market capitalisation of stablecoins is relatively small, nearly $130 billion, when compared to the traditional financial system, there is a possibility of continued interconnectedness, giving rise to financial stability risk concerns and negative spillover risks, which may be difficult to contain once the systemic exposure crosses a threshold.

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«The lack of authenticated data and inherent data gaps in the crypto ecosystem impede a proper assessment of financial stability risks,» it said. The central bank has also said that a total ban, containment or regulation are three policy responses it has offered to deal with cryptocurrencies. «Three