Blockchain Technology transcends regulatory and national boundaries, said Reserve Bank of India Governor Shaktikanta Das in his inaugural address at the FE Modern BFSI Summit on Friday, 17 June 2022
Blockchain Technology transcends regulatory and national boundaries, said Reserve Bank of India Governor Shaktikanta Das in his inaugural address at the FE Modern BFSI Summit on Friday, 17 June 2022. Das said that different blockchain platforms cannot be limited to a regulator or a nation. India has traditionally followed a hybrid form of regulation that combines activity and entity-based regulations.
Das said that another example in this case would be Decentralised Finance or DeFi, in which financial applications are processed on a blockchain with a limited or no involvement of centralised intermediaries. DeFi poses unique challenges to the regulators as its anonymity, lack of a centralised governance body, and legal uncertainties can make the traditional approach to the regulation somewhat ineffective. There is therefore, a case of globally coordinated regulatory approach and inter regulatory coordination to enable comprehensive assessment of such activities and mitigation of risks.
Das said that as a principle, the Reserve Bank has been applying comprehensive regulatory, supervisory and oversight requirements to various segments of the financial sector in its domain to create an enabling ecosystem for such activities to grow in an orderly fashion. Going forward, the central bank will continue to finetune its regulatory and supervisory measures keeping in mind the evolving dynamics of the financial sector.