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India’s crypto firms oppose RBI’s CBDC concept note that aims to replace private digital assets

India’s crypto firms oppose RBI’s CBDC concept note that aims to replace private digital assets

Days after the Reserve Bank of India (RBI) released its concept note on a central bank digital currency (CBDC), the institution has received backlash from crypto companies. 

In this line, executives of crypto firms operating in the country have termed RBI’s goal to replace digital assets with a CBDC as ‘comparing apples and oranges,’ Economic Times reported on October 9. 

“Is CBDC another Bitcoin (BTC)? The central bank is comparing apples to oranges. Cryptocurrencies are tokens. CBDC is a digital currency. We are comparing stocks. with INR? I didn’t realize that CBDC’s only goal was to replace virtual digital assets,” said an executive who sought anonymity. 

RBI accused of conservative crypto approach 

Elsewhere, another executive noted that the concept note points to RBI’s limited, conservative, and outdated perspective on cryptocurrencies. The CEO of crypto investment platform Koinbasket, Khaleelulla Baig, suggested that the approach points to the central bank’s need to maintain a fiat currency monopoly. 

“I see that money will continue to move and coexist in the form of fiat and cryptocurrencies as the way messages move and coexist today in the form of SMS and WhatsApp,” said Baig.

At the same time, the executives stated that the traditional finance sector could incorporate elements of the crypto space, like deploying distributed ledger technology, to enhance the accuracy of transactions. 

They agreed launching a CBDC aligns with India’s digital ecosystem growth while challenging the institution to be accommodative towards private assets. 

India’s crypto opposition

India’s opposition to private digital assets has been centered around promoting financial stability. Therefore, the CBDC has been fronted to be the sovereign digital currency in the country.

“It is the responsibility of the central bank to provide its citizens with risk-free central bank digital money,” RBI said. 

Notably, India has long expressed its intent to crack down on cryptocurrencies, with the RBI pushing for a ban on digital assets. However, due to the cross-border nature of digital assets, the regulator has been calling for international cooperation to achieve standard regulations. 

Overall, India’s crypto regulation space has been marred with confusion at a time the country is witnessing a growth in crypto users and entities offering related services. 

 

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