With growing concerns about cryptocurrency gaining ground in India as an investment avenue, Prime Minister Narendra Modi chaired a meeting reviewing extensive discussions on the matter.
Stakeholders believe attempts are being made to mislead young people by exaggerating returns. They highlighted that opaque advertising should be stopped and unregulated crypto markets should not become avenues for money laundering and terror financing.
Shaktikanta Das, Reserve Bank of India (RBI) Governor, had said that people are doing a certain activity. “As a central bank, we have serious concerns from the macroeconomic and financial stability points of views.” Das had reiterated his views against allowing cryptocurrencies saying they are a serious threat to any financial system since they are unregulated by central banks. The RBI has repeatedly sounded its strong views against cryptocurrencies saying they pose serious threats to the macroeconomic and financial stability of the country and also doubted the number of investors trading on them as well as their claimed market value.
A source said the government is cognizant of the fact that this is an evolving technology and will keep a close watch and take proactive steps. “There was consensus also that the steps taken in this field by the government will be progressive and forward looking. The government will continue to proactively engage with experts and other stakeholders since the issue cuts across geographical borders, it was felt that it will also require global partnerships and collective strategies.”
The source highlighted that the meeting was a comprehensive one. “It was also an outcome of a consultative process as RBI, Finance Ministry, and the Home Ministry had done an elaborate exercise on it as well as consulted experts from across the country and the world. Global examples and best practices were also looked at.”
In February this year, the RBI had instituted an internal panel to suggest a model of central bank’s digital currency. It had announced plans to come out with an official digital currency, in the face of proliferation of cryptocurrencies like Bitcoin and Ether. Private digital currencies, virtual currencies, cryptocurrencies have gained popularity in the past one decade. Regulators and governments have been skeptical about these currencies and are apprehensive about the associated risks.