RBI Governor has said globally coordinated efforts are needed to regulate blockchain technology
Reserve Bank of India Governor Shaktikanta Das on Friday emphasised on a globally coordinated approach to regulate technology-based operations like blockchain platforms and decentralised finance or DeFi.
During the course of his speech at the FE Modern BFSI Summit 2022, Mr Das noted, “Does regulation requires collaboration? Is it necessary for a regulator to collaborate with other regulators outside India as well as in other jurisdictions? When it comes to technology, it transcends regulatory or national boundaries. A relevant example is blockchain technology. Different blockchain platforms cannot be linked to a regulator or a particular nation. Another example is of decentralised finance, where financial applications are processed on a blockchain with minimum involvement of centralised intermediaries.”
Defi, the RBI Governor said, “causes unique challenge to regulators as its anonymity and lack of a centralised governing body and legal uncertainties can make conventional regulation ineffective. This therefore is a case for a globally collaborated and regulated approach as well as inter-regulatory coordination to enable comprehensive assessment of such activities and mitigation of risks”.