PTIThe Reserve Bank has "major concerns" on the cryptocurrencies traded in the market and has conveyed the same to the government, its governor Shaktikanta Das on Thursday said. Underlining that both the government and the RBI are "committed to financial stability", Das said there are no differences between the central bank and the Finance Ministry on the matter, and "we should now await the final decision on the matter" from the Centre.
The comments come in light of what has been termed as confusing signals from the government on the cryptocurrencies. After announcing its intent to completely ban such currencies, which are very volatile in nature without any underlying principle guiding its values, the government had shown some openness to such currencies like Bitcoin.
Speaking at the Times Network India Economic Conclave, Das said he has "reasons to believe" that the government is in agreement with the "major concerns" flagged by the RBI about the cryptocurrencies.
"Central bank digital currency is one thing. The cryptocurrencies which are traded in the market are something else. Both RBI and government are committed to financial stability. We have flagged certain concerns around these cryptocurrencies which are being traded in the market. We have flagged certain major concerns to the government," Das said.
He said the matter is still under the examination of the government, and a decision on this issue will be taken by it sooner than later.
It can be noted that the RBI had first banned such currencies through an order, which was struck down by the Supreme Court last year. The central bank's concerns stem from the non-fiat nature of such currencies which are touted as the future in some quarters, and in the volatile price movements in them. The RBI had also come out with an appeal cautioning people not to trade in such currencies in the past.
After the government proposed a complete ban on such currencies in a Bill presented in January, Finance Minister Nirmala Sitharaman had earlier this month said that she is all for encouraging experiments in the field, which was termed as a confusing signal in some quarters.
Das on Thursday said the RBI continues its work on a digital version of a fiat currency, and is currently "assessing the financial stability implications of introducing such a Central Bank Digital Currency (CBDC)".
"As the underlying technology is still developing, we are exploring ways for a clear, safe and legally certain settlement finality, which is most crucial for a secure and efficient payment system," he said.
Das added that there are not many "practical instances" of operationalisation of a CBDC globally, and this calls for "utmost precaution" before India goes ahead.
Meanwhile, Das said digital is the future across the banking landscape and "we will have a lot of shifts taking place on this front going ahead".
From a regulatory perspective, fostering effective regulations will be a priority for the RBI, he said, adding it is an endeavour not to constrain innovations but to promote those without compromising on financial sector stability, cybersecurity and customer protection.
The comments come in light of what has been termed as confusing signals from the government on the cryptocurrencies. After announcing its intent to completely ban such currencies, which are very volatile in nature without any underlying principle guiding its values, the government had shown some openness to such currencies like Bitcoin.
Speaking at the Times Network India Economic Conclave, Das said he has "reasons to believe" that the government is in agreement with the "major concerns" flagged by the RBI about the cryptocurrencies.
"Central bank digital currency is one thing. The cryptocurrencies which are traded in the market are something else. Both RBI and government are committed to financial stability. We have flagged certain concerns around these cryptocurrencies which are being traded in the market. We have flagged certain major concerns to the government," Das said.
He said the matter is still under the examination of the government, and a decision on this issue will be taken by it sooner than later.
It can be noted that the RBI had first banned such currencies through an order, which was struck down by the Supreme Court last year. The central bank's concerns stem from the non-fiat nature of such currencies which are touted as the future in some quarters, and in the volatile price movements in them. The RBI had also come out with an appeal cautioning people not to trade in such currencies in the past.
After the government proposed a complete ban on such currencies in a Bill presented in January, Finance Minister Nirmala Sitharaman had earlier this month said that she is all for encouraging experiments in the field, which was termed as a confusing signal in some quarters.
Das on Thursday said the RBI continues its work on a digital version of a fiat currency, and is currently "assessing the financial stability implications of introducing such a Central Bank Digital Currency (CBDC)".
"As the underlying technology is still developing, we are exploring ways for a clear, safe and legally certain settlement finality, which is most crucial for a secure and efficient payment system," he said.
Das added that there are not many "practical instances" of operationalisation of a CBDC globally, and this calls for "utmost precaution" before India goes ahead.
Meanwhile, Das said digital is the future across the banking landscape and "we will have a lot of shifts taking place on this front going ahead".
From a regulatory perspective, fostering effective regulations will be a priority for the RBI, he said, adding it is an endeavour not to constrain innovations but to promote those without compromising on financial sector stability, cybersecurity and customer protection.
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2 Comments on this Story
 | Vikash Kedia1 hour ago The problem is more to do with dollar and not cryptocurrency. With US having screwed up itâ s experimenting with printing money and not maintaining a relationship between dollar and their gold reserves, they are looking to move the world to cryptocurrency. What will be a fallback for cryptocurrency if one were to ask? Our government is being forced through our bigwigs who are partly controlled by FIIs to move towards cryptocurrency. The government should really move towards a universal currency such that no single country has monopoly over currency as has been enjoyed by US. That will create a level playing field for countries to compete. Ideally US should have been bankrupt 10 years back but their credit agencies have not even lowered their ratings one notch. And they have been buying stake in the whole world through printing money and controlling them now to influence the world decision making and being the whole world down in the event of a problem |
 | cigandhi@yahoo.com Gandhi1 hour ago crypto currency is most illegal thing govt is allowing to operate. it like undeclared or black money, govt has no control to even collect tax on its profit, it will simply ruin economy except it will allow people hide their undeclared income,this can only happen with support of politician. |