Balancing fintech regulation with innovation tricky: World Economic Forum

Countries in the Asia-Pacific (Apac) region have a more accommodative regime for fintech firms than others, said Blake who is a member of WEF’s executive committee. Citing a January 2024 report by WEF and the Cambridge Centre for Alternative Finance, he said about 70% of the surveyed fintech entrepreneurs gave the regulatory environment in the Apac region a favourable rating, higher than the global average of 63%. “If you’re a regulator, understanding the technological innovations that are happening (at a brisk pace) and then applying an appropriate framework to try and protect people from being scammed is not an easy task,” Blake told ET in an interview. In India, the Reserve Bank of India (RBI) and other regulators and the finance ministry seem to be holding regular deliberations with relevant sectors, he said. “My sense is there’s a push to self-regulate. I think those are good steps,” he added. There are instances of frauds by those who seek to take undue advantage of innovation. “So, the regulator needs to thread the needle in a way where it’s not easy (to perpetrate fraud),” Blake said. “But the bottom line is right now, it feels like the entrepreneurs and the regulators are on somewhat of an even keel. Whether or not the regulatory environment becomes stricter if you see more frauds – that’s a question to be seen.” In India, fintech regulations came under heightened public glare in recent months after the RBI imposed restrictions on Paytm Payments Bank Ltd, reportedly for the entity’s failure to comply with KYC norms and on money laundering concerns, among others. Vibrant economy The Indian economy is expected to remain “robust”, remaining a major contributor to global growth, Blake said. However, elevated inflation and interest rates, which are by and large global challenges, could pose risk to growth, he indicated. The International Monetary Fund has forecast India’s FY24 growth to touch 6.7%, more than double the global average. Crypto challenges Blake said the Centre for Financial and Monetary Systems will put out a research report on digital assets in the next few months, which will enable policymakers who are still deliberating what to do to make informed decisions about crypto assets. He said his team is in the process of studying digital asset policies and regulations in different jurisdictions including the UAE, Singapore, the US, Europe and a few others, and assessing the intended and unintended consequences flowing from such regulations. India’s push for a global framework to regulate crypto assets, given the cross-border nature of such transactions, is a “laudable” goal to pursue, Blake said. At present, different jurisdictions have adopted different regulatory standards for crypto and some have outrightly banned it, he added. (You can now subscribe to our Economic Times WhatsApp channel) Download The Economic Times News App to get Daily Market Updates & Live Business News. Subscribe to The Economic Times Prime and read the ET ePaper online. (You can now subscribe to our Economic Times WhatsApp channel) Read More News on Download The Economic Times News App to get Daily Market Updates & Live Business News. Subscribe to The Economic Times Prime and read the ET ePaper online.