India’s central bank, the Reserve Bank of India (RBI), has reportedly told the central board of directors that it favors a complete ban on cryptocurrencies, stating that a partial ban will not work. It reiterated its serious concern about crypto. The Indian government is making changes to its crypto bill, according to reports.
RBI Wants a Blanket Ban on Crypto, Says a Partial Ban Won’t Work
Friday saw the RBI hold the 592nd meeting of its central board of director under the chairship of Governor ShaktikantaDas. The top decision-making authority of the apex banking institution is the central board.
The current national and international economic environment, emerging issues, and potential remedial actions were all reviewed by the board. They also discussed aspects related to crypto and central bank digital currency, (CBDC).
According to reports, RBI stated at the meeting it supports a total ban on cryptocurrency, noting, however, that a partial ban would not work. The Economic Times reported that the RBI spoke out in favor of a total ban, and cited unnamed sources who were familiar with the discussions.
Top RBI officials highlighted numerous areas of concern regarding crypto, such as trackability, valuation, extreme volatility, legal issues and identification of participants.
Governor Shaktikanta Die reiterated his anti-cryptostance and stressed the serious threat cryptocurrencies pose to any financial system because they aren’t regulated centrally.
Das has repeatedly said that the central bank has serious concerns regarding cryptocurrencies, stating that they pose serious threats to India’s macroeconomic and financial stability.
“There is a need for much deeper discussions (on crypto). When the central bank says it has much deeper concerns from the point of macroeconomic and financial stability, there are far deeper issues involved which form part of this,” the central bank governor said in October.
The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 has been listed for consideration in the winter session of Lok Sabha, the lower house of India’s parliament. The government is reportedly planning to regulate crypto assets with the Securities and Exchange Board of India (SEBI) as the main regulator but ban crypto’s use for payments. There are reports that government officials are still working on the bill, and they will probably introduce it during the budget session.
In the meantime, the RBI has been working to create a digital rupee. This will be done in phases. According to the central bank, there will be two kinds of CBDC: wholesalers and retailers. “A lot of work has been done on wholesale-based CBDC while retail is somewhat complicated and will take more time. We will release a pilot, whichever is ready first,” RBI Deputy Governor T. Rabi Sankar explained.
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