Indian Central Bank Chief Raises Alarm on Cryptocurrencies

The governor of the Reserve Bank of India (RBI), Shaktikanta Das has raised fresh concerns over the impact of cryptocurrency investments on the country’s economy but is optimistic about the launch of a digital rupee.

In an interview with CNBC TV-18 on Wednesday, Das revealed that the monetary regulator had shared its “major concerns from the financial stability angle” with the government. However, he did not elaborate on what exactly these concerns are.

His remarks came ahead of the introduction of the bill that is expected to outlaw the distribution and usage of cryptocurrencies in India. Additionally, he said that the government is considering RBI’s concerns and expecting a decision “sooner or later.”

The Indian central bank has always been critical about digital currencies as it earlier warned against their usage in Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term and terror financing. Its hostility peaked in 2018 when it issued a circular banning all regulated banking entities from offering services to crypto companies. That order was reversed by the apex court.

Now, when the demand for Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term is surging again, the Indian government is planning to ban them by law.

“If required, the Parliament also will consider and decide,” Das said.

Digital Rupee Is on the Way

However, the RBI is in favor of a central bank digital currency (CBDC) as the governor said that a “lot of work is going on there.”

“The RBI team is working on it, both the technology side as well as the procedural side,” Das added.

The Indian central bank is lagging much behind its Chinese counterpart, which is aggressively piloting the usage of digital yuan. Though Das could not confirm any timeline of digital rupee launch, he said that the regulator is “targeting to launch” at some point.

“Several loose ends need to be tied up, but it's receiving our full attention,” he said.