RBI In Favor Of A Complete Ban On Crypto, Says It's A Serious Concern For Them

Continuing its stance in favour of a blanket ban on cryptocurrency, the RBI has recently conveyed to its Central Board that cryptocurrency is a serious concern for them. According to people familiar with deliberations told ET, the RBI in its 592nd central board of directors meeting held in Lucknow on December 17th 2021, conveyed to the board that it favours a complete ban on cryptocurrencies.

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RBIĄ¯s concerns

RBI reportedly made a detailed presentation to the board highlighting "serious concerns" relating to macroeconomic and financial stability as well as exchange management. RBI highlighted the challenge of regulating intangible assets that originate overseas. As per sources, the central board was apprised of RBI's stance on the matter.

RBI also mentioned that cryptocurrencies are available for trading on foreign exchanges, pointing to concerns over the anonymity of transactions.

Earlier last month, Governor Shaktikanta Das had said that "cryptocurrencies are a serious concern to RBI from a macroeconomic and financial stability standpoint. As the central banker, we have serious concerns about it and we have flagged it many times."

Also Read: Majority Of Indians Don't Want Cryptocurrency To Be Legalised, Finds Survey

The need for a balanced view

As per the information reported from sources to ET, some board members at the RBI meeting sought a balanced view on these digital assets, taking into account developments in the technological space and larger implications for the financial sector. In a press statement, the RBI said that the board also discussed various aspects relating to the Central Bank Digital Currency and private cryptocurrencies.

The press release also mentioned that meanwhile, RBI has been working towards a phased implementation strategy for a central bank digital currency (CBDC). The board also evaluated the present domestic and global economic situation, evolving challenges and remedial measures.

Also Read: Govt Regulation Is Good: Five Crypto Startups React To India's Crypto Bill Noise

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RBIĄ¯s aim for introduction of its own digital currency soon

In August 2021, the RBI Governor reportedly signalled towards the launch of the first-ever trials for the digital rupee in India, which is also being referred to as central bank digital currencies (CBDC). This digital currency is proposed to be a legal tender in the online form.

SBI Chairman's reaction to RBIĄ¯s digital currency

The SBIĄ¯s Chairman has recently said that the RBIĄ¯s digital currency is going to be a reality soon and will play a key role in cross border transactions. Currently, the Reserve Bank of India (RBI) is working on two sets of CBDCs, one wholesale account-based and the other retail-based.

At the ISB Leadership summit held in December 2021, on ĄŽFuture of BankingĄą, he said that while cryptocurrency would be an asset class, CBDC is eventually going to transform how cross border transactions take place. As per him, it's only a matter of time, and there is no way countries across the world can stay away from CBDC.

Also Read: Crazy For Crypto? 20 Terms You Must Know Before Investing In Cryptocurrency

The road ahead?

While the country is keenly waiting for the much anticipated Crypto bill, RBIĄ¯s continuous emphasis on being in favour of the crypto ban has been a talking point for long.

Although the government has attempted to clarify that the bill would regulate and not ban cryptocurrency, the Central BankĄ¯s concern towards this issue is what adds to the confusion. Recently, Infosys Non-executive Chairman Nandan Nilekani had said that crypto-assets can be used to bring about more financial inclusion. And Kotak Mahindra Bank also became the first major bank to open doors to crypto trading this month itself.

All in all, the future of the crypto industry in India would certainly become clearer through the much-awaited introduction of this Crypto bill in Parliament, whose introduction is expected to be delayed till the Budget Session of 2022.

Also Read: How RBI's Tokenization Rule Will Impact Your Card Payments From January 1, 2022

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