- Reserve Bank of India red-flags cryptocurrency risks in board meet
The Reserve Bank of India (RBI) on Friday apprised the board members about its reservations around private cryptocurrencies while updating the progress on its yet-to-be launched Central Bank Digital Currency (CBDC). In the 592nd meeting of RBI’s board of directors at Lucknow, senior officials, including Governor Shaktikanta Das, who also headed the board, discussed a host of issues, including the CBDC.
Cryptocurrencies, according to a source, was not part of the agenda, but one board member wanted to know why the central bank wanted to ban private cryptocurrencies.
Internal members of the Reserve Bank of India's central board are not in favor of private crypto currencies and majority remain concerned about its impact on financial stability, sources told NDTV. The central bank's board today discussed various aspects related to Central Bank Digital Currency (CBDC) and private cryptocurrencies.
The government plans to regulate the use of cryptocurrency across the country and has listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, for consideration in the ongoing Winter Session of Parliament.
It was recently announced in the Parliament that the government had received a proposal from the Reserve Bank of India (RBI) in October 2021 for the amendment to the Reserve Bank of India Act, 1934 to enhance the scope of the definition of 'bank note' to include a currency in the digital form.
The RBI has been examining the use cases and working out a phased implementation strategy for the introduction of Central Bank Digital Currency. However, the central bank has repeatedly expressed its views against cryptocurrencies, saying that it poses serious threats to the macroeconomic and financial stability of the country, and also doubted the number of investors trading on them and their claimed market value.
Shaktikanta Das too had reiterated his views against allowing cryptocurrencies, saying they are serious threats to any financial system since they are unregulated by central banks.
he 592nd meeting of the Central Board of Directors of Reserve Bank of India was held at Lucknow under the chairmanship of RBI Governor Shaktikanta Das, said the RBI in a statement today.
The RBI board also reviewed the current domestic and global economic situation, evolving challenges and remedial measures.
Crypto ban tough to impose: Gopinath
Cryptocurrency Bill 2021: New crypto bill to be introduced in Parliament after Cabinet approval
Cryptocurrency and Official Digital Currency Bill 2021 in Parliament (Updates): The Government will introduce the much-awaited ‘The Cryptocurrency and Regulation of Official Digital Currency Bill 2021’ in Parliament during the ongoing Winter Session. The Bill may be introduced in the coming days. It is not on the revised ‘List of Business’ of the Lok Sabha for November 30, 2021. Meanwhile, Finance Minister Nirmala Sitharaman on Tuesday (November 30) said in Rajya Sabha that a new crypto bill will be introduced in the House after approval from the Cabinet.
The Crypto industry is awaiting a positive regulation that may permit investing and trading in crypto with certain restrictions. The buzz around the Crypto Bill till now has been both positive and negative. The Crypto Bill is one of the many items on the list of bills to be introduced in Parliament during the Winter Session. Last week, confusion and panic gripped the crypto market in India as the wordings of the description of cryptocurrency bill on the list was the same as last year. It repeated the Govt’s intention to ban private cryptocurrencies. However, opinions are divided till now as to what the government means by using the term private cryptocurrency. For full clarity, we will have to wait till Cryptocurrency Bill 2021 comes into the public domain.
According to Edul Patel, CEO and Co-founder of crypto investment platform Mudrex, currently, there are more than 11,000 cryptocurrencies that are traded across exchanges. There is a lack of clarity in terms of what the government means by private cryptocurrencies. Cryptocurrencies like bitcoin, Ether and other cryptos are available across centralised and decentralised exchanges. However, all of these cryptos are created by developers or companies, and not by governments.
“The term private cryptocurrencies is interesting because there was news about governments coming up with their own cryptocurrency. These cryptocurrencies are known as CBDCs or Central Bank Digital Currencies. There could be a possibility that these CBDCs are public cryptocurrencies and all others be classified under private cryptocurrencies. However, it will be interesting to see what comes under the ambit of private cryptocurrencies,” Patel told FE Online.