RBI Calls for Outright Ban of Crypto, Argues that Partial Ban Would Fail

The Reserve Bank of India (RBI) recently sat for its 592nd meeting of the central bank of directors chaired by RBI Governor Shaktikanta Das. The Central Board is the RBI’s highest decision-making committee.

The panel discussed the prevailing domestic and global economic conditions, evolving challenges, and measures to address the lingering economic issues. The directors also talked about matters relating to cryptocurrency and central bank digital currency (CBDC).

At the meeting, the apex bank reportedly asserted that it supports an outright ban of cryptocurrencies, arguing that a partial ban would not yield much. The Economic Times revealed the development on Friday, noting that the information came from anonymous sources involved in the deliberations.

Meanwhile, senior RBI officials cited several numerous areas of cryptocurrency-related concern, including trackability of transactions, valuation, extreme price volatility, legal issues, and identifying identities behind transactions.

RBI Governor Says Crypto Destabilizes Economies

Das took the chance to reiterate his anti-crypto stance, emphasizing that cryptos pose significant threats to any financial system, considering that they are unregulated by the central bank.

The RBI Governor has argued time and again that the RBI has acute reservations against cryptocurrencies, noting that they pose a threat to the Asian nation’s macroeconomic and financial stability. In October, Das argued that: “There is a need for much deeper discussions (on crypto). When the central bank says it has much deeper concerns from the point of macroeconomic and financial stability, there are far deeper issues involved which form part of this.”

As we reported previously, the Cryptocurrency and Regulation of Official Digital Currency Bill 2021 will be deliberated upon by the Lok Sabha (the lower house of India’s parliament) in February 2022. The Indian government reportedly has plans to regulate crypto exchanges with the Securities and Exchange Board of India (SEBI) overseeing the regulatory process. However, the bill aims at outlawing the use of cryptocurrency for payments.

There are claims that the government plans to rework the bill and will likely introduce it in the budget session next year.