RBI Governor Shaktikanta Das has again said that cryptocurrencies pose a threat to India's financial stability. Amid growing interest, what does the RBI's tough stance mean for virtual currencies?
At a summit organized by the Business Standard, RBI governor Shaktikanta Das expressed doubt over the credibility of reports claiming a huge public interest in cryptocurrencies. Das said it looked like a marketing ploy to attract more people into that system. He was referring to a recent report of a research firm that claimed that at least 7.9 per cent of Indians have invested $10 billion dollars in virtual currencies.
Trade-in cryptocurrencies is unregulated in India. The government is consulting various stakeholders, including the RBI, to finalize the contours of a bill on it. RBI’s internal panel report on cryptocurrencies is also expected in a few days. So let us examine what the RBI and the government are thinking about it
RBI’s stance
The Reserve Bank of India’s stand on virtual currencies had been clear since the very beginning.
It always looked at it with suspicion and considered it as a threat to the country's macroeconomic and financial stability. On Wednesday, the RBI governor reiterated his strong views against cryptocurrencies, saying that they are a cause for serious concern.
At the Business Standard-BFSI Summit, this is what the RBI governor told consulting editor Tamal Bandyopadhyay:
Cryptocurrencies are a cause for serious concern
They will have an impact on macroeconomic and financial stability
The number of participants in the crypto market exaggerated
The government’s stand so far
The government is reportedly considering a middle path on cryptocurrencies. A government source recently told a financial daily that while the hardline stance of banning cryptocurrencies outright was not considered feasible due to the large investments made in such instruments by Indians, these virtual currencies were also unlikely to be allowed as legal tender.
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