After issuing a circular on Monday about cryptocurrencies, the Reserve Bank of India [RBI] has now clarified that it still retains concerns about the asset class, concerns which it has conveyed to the government again.
Back in March 2020, the Supreme Court of India had quashed the RBI’s circular from 2018, one that banned banks from processing payments associated with cryptos. At the time, however, many banks ignored the ruling and continued to follow the repealed order. On 31 May, the RBI finally made it clear that the circular is “no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from.”
While the news offered relief to crypto-holders in the country, the RBI has not changed its position on cryptocurrencies. In fact, RBI Governor Shaktikanta Das is in the news today after he said,
“There is no change in RBI’s position (regarding cryptocurrencies). And, with regards to RBI’s position, we have major concerns about cryptocurrencies, which we have conveyed to the government. And, with regard to investors, it is for each investor to do his own due diligence and take a very careful and prudent call.”
The lack of regulatory clarity has been hurting businesses and crypto-investors within the country for a long time. Although there remains a divide between a part of the population supporting crypto and the regulators, the government has not yet clarified its own position. Back in March, for instance, Finance Minister Nirmala Sitharaman had spoken about taking a “calibrated” approach regarding crypto, but the governor of RBI claims to have the government’s support about concerns surrounding this field.
Das had also noted,
“Central bank digital currency is one thing. The cryptocurrencies which are traded in the market are something else. Both RBI and government are committed to financial stability. We have flagged certain concerns around these cryptocurrencies which are being traded in the market. We have flagged certain major concerns to the government.”
There have been reports that the government will set up a new panel to decide on cryptocurrency regulation in the country. With the RBI opting for the cautious, hands-off route, it would be interesting to see whether the cryptocurrencies finally get representation in case a panel is formed.
