Reserve Bank of India Still Has Its Fears Regarding Virtual Currencies

Indian central bank’s Governor says that he is still not convinced with the usage of cryptocurrencies so there is disbelief within the Reserve Bank of India. He opines that the usage of virtual currencies in India may lead to financial instability.

At present, the Indian Government is in the process of approving or non-approving of the proposed crypto bill, which is pending approval before Parliament. However, the fate of virtual currencies’ usage in India is still shrouding in mystery.

Shaktikanta Das is the Governor of the Reserve Bank of India (RBI), which is the Indian central bank. RBI’s most anticipated project is the one that involves the development of Indian central bank-owned cryptocurrency i.e. (CBDC). The project is headed by Governor Das and he is hopeful that the project is going to be successful because Indian has thirst for crypto.

However, whenever he has been asked to render his opinion regarding crypto, he does not seem very convincing about that. He has kept one particular stance since RBI has initiated work on the Indian CDBC project. He thinks that crypto usage is not in favor of the Indian economy, though it involves greater public interest.

Thereafter a crypto bill was presented for approval by Indian lawmakers before the Parliament. It is hoped that the draft bill will be approved very soon because the Parliament has already disclosed their intention of adopting the proposal. The draft proposal was also impacting upon the Indian tax regime and therefore the tax authority too was required to provide amendments. However, the Government is still considering the tax amendments, which will then be presented to the Indian Parliament. This is why the crypto bill is kept pending because before sanctioning it, taxation law would need to be amended first.

An Indian journalist from the print media questioned RBI’s Governor to give his opinion on the usage of crypto in India. In response, the Governor suggested that the Covid-19 pandemic had seriously affected the country’s economy. There is financial instability and the Government and its functionaries are facing challenges how to boost the economy. He said that many countries are adopting cryptocurrencies in the hope to boost their economies. However, no one is certain about the outcome and, hence, the adoption of virtual currencies could lead to financial instability. For this reason, RBI, and not even he himself, feel that crypto usage can do any good to the Indian economy.

He then spoke about the Indian CBDC project and said that the focus of the nation should be towards the Indian CBDC. Indian CBDC will be issued by RBI and would have a solid foundation. Otherwise, there are more than a thousand virtual currencies but the frauds are happening on daily basis, said RBI’s Governor.

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