The Central Bank of India has expressed serious concern about cryptocurrencies
The Central Bank of India continues to express serious concern about the effect of cryptocurrencies on macroeconomic and financial stability. Additionally, the governor of the Central Bank, Shaktikanta Das said that he questions the credibility of the number of Indian crypto investors reported by the media.
He added that all concerns about cryptocurrencies have been reported to the government, which is now considering this issue and will soon make its decision.
Representatives of the India’s Central Bank have said many times about their concerns about cryptocurrencies. In September, Das informed that cryptocurrencies can break the financial stability of the country.
Another concern expressed by the Central Bank is related to the anonymity the digital currencies facilitate. Financial institutions cannot track cryptocurrency flows, which can be used for money laundering and tax evasion. The Central Bank also announced its intention to launch an official digital currency.
Now the Indian authorities are developing legislation that will allow the regulation of digital assets. According to local media reports, a representative of the Ministry of Finance recently stated that the government is trying to speed up the creation of a cryptocurrency law, which will be presented at the winter session of parliament.
Das has also questioned the reliability of information about the number of crypto investors and the size of the crypto sector in India reported by the media. He explained that the number of crypto investors looks overstated. However, due to the fact that at the moment digital assets are not regulated by banks, this data cannot be verified.
According to media reports, about 70% of crypto investors in India have invested only about 1,000 rupees in digital currencies. Das believes that this may be an attempt by crypto exchanges to increase their popularity among the people.
For the first time, the Central Bank of India expressed concerns about cryptocurrencies in 2013. In 2018, the bank issued a circular discouraging the use of digital currencies and the provision of any related services. In 2020, the apex court overturned this circular, which led to a significant increase in the turnover of cryptocurrencies in the country.
Based on information obtained by the research firm Crebaco, about 105 million Indians have invested in crypto assets. The total amount of crypto investments made by Indian citizens is about $10 billion. The age of 20% of crypto investors is not over 20 years.
In the spring, Reuters reported that the Indian authorities are developing a law to ban cryptocurrencies. And in the summer, it was reported that El Salvador was the first to recognize Bitcoin as a legal tender.