'How Bitcoin would Help the Indian Economy': The Governor of the Reserve Bank of India has Major Concerns About Cryptocurrency.
Shaktikanta Das, the Governor of the Reserve Bank of India (RBI), remarked on Thursday at an event organised by The Indian Express and the Financial Times that the central bank continues to have "severe and big" worries about cryptocurrencies such as Bitcoin.
This matter was communicated to India's government. However, according to the article, Das stated that the government has the final say on the matter and that they must determine what to do.
The RBI would like to have convincing explanations and answers about the value that such instruments (cryptocurrencies) can provide to the Indian economy, according to Das.
It's worth noting that cryptocurrencies are under governmental scrutiny and have been for some time, with the government still undecided about whether or not to completely legalise them.
Despite the obvious absence of regulation, highly complex mining methods, and price volatility that make it such a volatile financial instrument, this is the case. According to the report, there are currently requests to consider cryptocurrency as a foreign asset.
El Salvador was one of the first countries to recognise Bitcoin as a legal tender. The digital asset was recognised by the South American nation earlier this week, on September 7, 2021.
The country has made the decision to accept cryptocurrency as legal cash. Following this, the country has been experiencing waves of civil unrest as a result of the currency's 20% value correction in a single day, according to sources.
“We have addressed our severe and substantial worries about cryptocurrencies to the government from the standpoint of financial stability,” Das said during the event. The final decision will be made by the government.”
“I believe we need more reliable information to determine whether private cryptocurrencies as a whole will make a future contribution to the Indian economy. He went on to say, "I believe we need more reliable explanations and answers to be persuaded."
The apex bank had initially prohibited domestic bankers from assisting cryptocurrency trades, but this was changed after the regulation was overturned by the Supreme Court. Some banks are said to have reinstated these services. According to the report, Das stated earlier this year in March that he has reason to think that the government shares the RBI's concerns.
India, on the other hand, has been working toward its own version of a legally recognised digital rupee. The RBI is planning a phased launch of the asset, also known as the Central Bank Digital Currency.
Last month, Das stated that the digital currency would be launched with pilot programmes by December. The Central Bank Digital Currency, unlike cryptocurrency, will be regulated.
Most intriguingly, it will be a digital representation of the current monetary system rather than an asset. It will be a one-to-one exchange rate with the Indian Rupee.
Cryptocurrencies, on the other hand, can be thought of as commodities with a fixed value, similar to gold or silver.
That value will be consistent across the board, regardless of the country in which it is exchanged, with the only variable being the currency conversion rate used to represent that value.
The RBI intends to launch the central bank digital money as a mass-market digital asset., according to Das.
The Reserve Bank of India (RBI) had issued a statement claiming that the central bank's digital currency and the interest it earned as an asset were universal. Few countries, however, have even approached the pilot stage of initiating such an initiative.