Shaktikanta Das expresses RBI's concern over impact of cryptocurrencies on India's financial stability

According to RBI Governor Shaktikanta Das, the Reserve Bank of India (RBI) is concerned over the impact cryptocurrencies may have on the financial stability in the economy and has conveyed the same to the government.

He said "We have certain major concerns about cryptocurrencies. We have communicated them to the government. It is under consideration in the government and I do expect and I think sooner or later the government will take a call and if required Parliament also will consider and decide. I want to make it clear that blockchain technology is different. Blockchain technology benefits have to be exploited, that is another thing. But on crypto, we have major concerns from the financial stability angle and we have shared it with the government. The government will consider and take a call.”

The government is planning to introduce a bill in Parliament to bar companies and individuals from dealing in cryptocurrencies while creating a framework for an official digital currency.

The RBI had in 2018 banned banks and other regulated entities from supporting crypto transactions after digital currencies were used for frauds. The Supreme Court cut the curbs last year in response to a petition by cryptocurrency exchanges.

Das said the RBI is "very much in the game" and is getting ready to launch its own digital currency.Central bank digital currency is work in progress. RBI team is working on it, technology side and procedural side, how it will be launched and rolled out.”

If this happens, the RBI will join other central banks including that of China, where it has electronic yuan.

While no date for the rollout has been set, the project is "receiving our full attention" and the central bank is "tying up several loose ends", Das said. The Reserve Bank had earlier this month said that it will allow retail investors to invest directly in Government securities (G-Sec) markets.