The Reserve Bank of India (RBI) has informed its central board that it supports a blanket ban on cryptocurrencies, as per persons close to the discussions at the central bank’s board meeting on Friday, December 17.
India’s central bank presented a lengthy presentation to the board, citing “serious concerns” pertaining to macroeconomic and financial stability, as well as exchange management, according to one source who spoke to The Economic Times.
As per the individual, “the board was apprised of RBI’s stance on the matter.”
Also, the central bank emphasized the difficulty of regulating intangible assets that have their origins overseas. RBI officials have said that these are accessible for trading on foreign exchanges, citing concerns about the secrecy of transactions, according to another source.
Some board members want a balanced perspective
As per a second individual, some board members wanted a more balanced perspective on these digital assets, one that considers technical advancements and the broader ramifications to the financial sector.
On Friday, the Reserve Bank of India released a statement saying that:
“The board also discussed various aspects relating to the Central Bank Digital Currency and private cryptocurrencies.”
Notably, the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, has been included on the government’s list of bills to be introduced in the Lok Sabha during the winter session of parliament.
The bill had been previously scheduled for introduction during the budget session as well, but it was unable to be done so since the administration opted to revise it.
Bill to provide a digital currency framework
In particular, the proposed law aims to provide a framework for the formation of an official digital currency that the Reserve Bank of India would issue. Specifically, it seeks to restrict private cryptocurrencies in India while allowing for specific exceptions in order to encourage the underlying technology of crypto and its applications.
Finally, the parameters of the proposed framework for cryptocurrencies will be finalized by Prime Minister Narendra Modi, who will make the ultimate decision.
However, the bill is unlikely to be tabled during the current legislative session because the administration wants to conduct more extensive consultations beforehand despite the Prime Minister already having had a number of rounds of negotiations on the subject.