RBI Supports a Full Ban on Cryptocurrencies in India

The Reserve Bank of India is in favor of a total ban on cryptocurrencies, Economic Times of India writes.

The news comes from anonymous sources familiar with the bank’s deliberations.

The RBI made a presentation to its board recently in which it said it had “serious concerns” as to the stability and exchange management of cryptos.

In addition, the bank also highlighted the difficulties of putting regulations on intangible currencies which did not even originate in the country.

“Cryptocurrencies are a serious concern to RBI from a macroeconomic and financial stability standpoint,” RBI governor Shaktikanta Das has said previously. “As the central banker, we have serious concerns about it and we have flagged it many times.”

But other board members set a tone of deliberation, positing that the developments in tech and implications for the tech world merited discussion.

The bill the government is looking at creating, the the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, would involve a creation of an official digital currency, which would be issued by the RBI.

Private cryptocurrencies would then be banned, though there would be exceptions made for ways to promote the basic tech of crypto and its uses.

Shaktikanta Das has said the risk of cyber fraud has posed challenges to a successful CBDC rollout.

Read more: Cyber Risks Pose Challenge to CBDC Rollout in India; Digital Payments Growing at Record Highs

He said the main concern “comes from the angle of cyber security and the possibility of digital frauds, so we have to be very careful about that.”

“A few years ago, we had major concerns around fake Indian currency notes. Similar things can also happen when you are launching a central bank digital currency,” he said, according to PYMNTS.

But in spite of that, RBI deputy governor T Rabi Sankar said there has been big progress made on the main parts of the CBDC. But issues with the retail part have slowed things down. He said the retail one was “more complicated.” And whichever version is ready first will go to pilot, according to him.