The Reserve Bank of India’s issues with the cryptocurrency space continue as the nation’s central bank has expressed “major concerns” about its development and potential impact on the country’s economy.
Simultaneously, though, bank representatives have confirmed that the world’s second most populated country is looking into launching a digital rupee.
Crypto is a Major Concern, RBI Says
It’s no secret that India’s central bank has had issues with the cryptocurrency industry for years. The RBI prohibited its clients from working with any digital asset representatives in 2018, which was regarded as an all-out ban.
Although India’s Supreme Court ultimately lifted this decision in 2020, the RBI has taken every opportunity to highlight potential problems coming from bitcoin or other crypto assets. The latest set of such issues came from the current governor of the bank – Shaktikanta Das.
Cited by Bloomberg, the 63-year-old said that the RBI had sent all these “major concerns” to the Indian government. Although he failed to disclose their precise nature, he has previously indicated that the alleged usage of cryptocurrencies in illegal activities and money laundering have raised many red flags.
Das’s comments come amid discussions within the Indian government to institute a ban on private cryptocurrencies. If accepted, the proposed legislation will essentially make the entire industry illegal within the nation’s borders.
Going for a Digital Rupee
While the RBI and the government explore a way to ban private cryptocurrencies, both parties are heading down the road of launching a central bank digital currency (CBDC).
Das confirmed the speculations saying that the bank is “very much in the game” in developing and launching the digital form of the rupee. The bank hasn’t set a date for releasing it, but Das said that the project is “receiving our full attention.”
With its plans to roll out a digital currency, the RBI has joined other nations with similar intentions. Perhaps no other central bank is more advanced on this matter than the People’s Bank of China.
The world’s most populated country has taken its CBDC testing to the people with several trials in different regions. The latest and largest one, reported by CNBC, will occur in the southwestern Chinese city of Chengdu.
Citizens can join through a lottery for one of 200,000 vouchers, each worth between $27 and $37. Consequently, the total handout will be 40.2 million yuan ($6.2 million).