RBI Governor: Need credible answers on contribution of cryptos to Indian economy: RBI’s Das

Synopsis

Das, who was speaking at the Indian Express-Financial Times event, reiterated that the central bank has “serious” and “major” concerns about cryptocurrencies and their impact on the financial stability in the country.

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MUMBAI: The Reserve Bank of India’s Governor Shaktikanta Das today said that the central bank would like to see credible answers on what would be the contribution of private cryptocurrencies to the Indian economy.

Das, who was speaking at the Indian Express-Financial Times event, reiterated that the central bank has “serious” and “major” concerns about cryptocurrencies and their impact on the financial stability in the country.

The Indian government is currently in the process of formulating a cryptocurrency bill that may seek to outlaw all private cryptocurrency, while laying down the path for the introduction of central bank digital currency in India.

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India has emerged as one of the biggest hubs for cryptocurrency adoption in the world with some pegging the total value of cryptocurrency owned by Indians at over $6.5 billion as of May 2021. The ownership of crypto assets in India has ballooned 400 per cent over the past 17 months.

According to a survey by Finder, almost 30 per cent of the respondents in India said that they owned private cryptocurrencies in their investment portfolio making it the third-highest among Asian countries.

The surge in demand for cryptocurrencies has led to an explosion in cryptocurrency exchanges in the country backed by investments from marquee global private equity and crypto investors such as Tiger Global, Binance and others.

Recent media reports have suggested that the government may look at designating cryptocurrency as a commodity, which will allow them to function as an asset class like equity, bonds and gold. However, the government has yet to finalise the bill, which is awaiting the approval of the Cabinet and the Parliament.

In the past, Finance Minister Nirmala Sitharaman has suggested that the government is open to taking a calibrated approach towards cryptocurrencies after facing backlash from the crypto industry, which has since gone on a massive public relations drive to spread awareness on the asset.

Source

Updated: 09/09/2021 — 09:00