According to Das, the RBI’s stance on crypto remains the same, stating that they cannot be considered as a financial product and should be treated like gambling activities, India Today reported on January 13.
The threat posed by crypto
Das argued that the threat posed by crypto on the financial sector is due to the lack of underlying value while warning that allowing digital assets to grow will undermine the bank’s role in controlling the money supply. Amid the call to ban cryptocurrencies, the governor acknowledged that the government needs to support blockchain technology due to its underlying benefits. As reported by Finbold, RBI has been advocating for outlawing private cryptocurrencies at some point, warning that digital assets might lead to the next financial crisis.
Countering private crypto
To counter the growth of cryptocurrencies like Bitcoin (BTC), the bank is pushing for the rollout of a central bank digital currency (CBDC) and has since released a concept note. However, the note has received backlash from the crypto and blockchain industries operating in the country on the grounds of being regressive. It is worth mentioning that India has been pushing for a global approach to regulating cryptocurrencies, citing the sector’s cross-border nature. Despite the uncertainty in crypto regulations, India still accounts for a significant share of digital asset investors.
