The government has to decide what to do in the matter, said Shaktikanta Das, adding that he expects credible answers on the value such instruments bring to the Indian economy.
Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday, September 9, said the central bank has “serious and major” concerns in relation to the financial stability of cryptocurrencies like Bitcoin. Speaking at an event organised by The Indian Express and Financial Times, the RBI chief said, “We have serious, major concerns on cryptocurrency with regard to financial stability…have conveyed the same to the Government of India.”
The government has to decide what to do in the matter, said Das, adding that he expects credible answers on the value such instruments bring to the Indian economy. “I think we need more credible answers as to whether going forward, the whole private cryptocurrencies, what contribution it will make to the Indian economy going forward. I think we need to be convinced with more credible explanations and answers (sic).”
On June 4 as well, the RBI Governor had underlined his concerns on cryptocurrency. “We have major concerns on cryptocurrency, which we have conveyed to the government. With regard to advice to investors, well, central banks don’t give any investment advice. It’s up to each investor to make his own appraisal, to do his own due diligence and take a very careful call with regard to his own investments,” Das had said.
The RBI Governor’s latest comments come against the backdrop of a national regulation on private cryptocurrencies, which the government is in the advanced stages of finalising. Finance Minister Nirmala Sitharaman on August 16 had stated that the Union Cabinet was soon expected to take up a Bill to regulate cryptocurrency and its burgeoning market in India. An inter-ministerial panel headed by former finance secretary Subhash Chandra Garg recently submitted a report seeking a ban on cryptocurrencies and authorising a digital currency of the RBI.
As part of the new draft Bill, cryptocurrencies will reportedly be treated as an asset/commodity for all purposes, including taxation and as per user case — payments, investment or utility. The cryptocurrency bill’s main aim is to create an official digital currency issued by the Reserve Bank of India, and it seeks to prohibit all private cryptocurrencies in the country.
While the RBI is not in favour of private cryptocurrency, it supports the creation of a central bank digital currency. Top RBI officials have indicated in the past that the central bank is working on this model and is likely to announce its decisions by the end of this year. As per data from crypto exchanges, there are around 1.5 crore Indians who have invested in cryptocurrencies worth Rs 15,000 crore. Further, there are 350 startups that operate in the blockchain and crypto space.