Anantha Nageswaran (India’s Chief Economist Advisor, CEA) has called on regulators to not hinder innovation in the crypto-gaming sector.

Nageswaran, who spoke at the 2024 Global Economic Policy Forum in New York on Wednesday, stressed the importance regulatory transparency. Nageswaran also urged for a balance to be struck between innovation and social costs.

In a country where the per capita income is low and there is financial illiteracy among its citizens, it’s not necessary to encourage every innovation without question. You need to do a social benefit-cost analysis for innovations like Crypto and online gaming.

He acknowledged that financial literacy is a challenge in nations with low incomes and the need to assess emerging sectors.

Nageswaran also urged regulators to make sure their actions are guided with clear objectives.

He said that regulators must provide information on why they are introducing a certain regulation. The proposal should also include the goals and objectives.

He added that a transparent system would encourage accountability and trust.

Nageswaran also warned regulators not to delegate “unelected powers” to independent government agencies.

Regulators must be aware of their unelected power and be accountable. Information sharing between Regulators must be transparent.

His call comes at a time when India is struggling with crypto regulations. This includes a 30% tax for crypto profits. But several important crypto leaders in India are hoping to see a positive policy framework.

Sumit Gupta told CryptoNews in early this year that, “if taken positively, [cryptos] can provide a level-playing field for domestic exchanges.”

Nageswaran calls on regulators to distinguish between financial and non-financial regulations

Nageswaran, according to a PTI article, stressed the importance of differentiating between regulations pertaining to the financial sector and those relating to non-financial sectors. This will reduce the excessive risk of competition instability and mitigate excessive risks.

“We need to distinguish between the regulation of the financial sector, and that of non-financial sectors.”

In the non-financial sectors, he added, the market or the competition will determine the actions of regulators. In the financial sector, however, regulators are inclined to over-regulate.