In favour of complete ban on cryptos: RBI to Central Board

The Reserve Bank of India (RBI) has conveyed to its central board that it favours a complete ban on cryptocurrencies, people familiar with deliberations at the central bank's board meeting on Friday told ET.

The RBI made a detailed presentation to the board highlighting "serious concerns" relating to macroeconomic and financial stability as well as exchange management, said one person. "The board was apprised of RBI's stance on the matter." The central bank also highlighted the challenge of regulating intangible assets that originate overseas.

Some Sought a Balanced View

RBI said these are available for trading on foreign exchanges, pointing to concerns over the anonymity of transactions, another person said.

"Cryptocurrencies are a serious concern to RBI from a macroeconomic and financial stability standpoint," RBI governor Shaktikanta Das has said previously. "As the central banker, we have serious concerns about it and we have flagged it many times."

Some board members sought a balanced view on these digital assets, taking into account developments in the technological space and larger implications for the financial sector, the second person said.

"The board also discussed various aspects relating to the Central Bank Digital Currency and private crypto currencies," the RBI said in a statement on Friday.

The government had listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, for introduction in the Lok Sabha in the winter session of parliament. It had earlier been listed for the budget session as well but could not be introduced as the government decided to rework it.

The proposed bill seeks to create a framework for the creation of an official digital currency to be issued by the RBI. It aims to prohibit private cryptocurrencies in India while allowing for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

Prime Minister Narendra Modi is to take a final call on the contours of the proposed framework for cryptocurrencies. ET had reported earlier this week that the bill is unlikely to be introduced in the current session as the government wants to hold wider consultations.

The PM has already held several rounds of discussions on the matter.

A high-level government panel had in July 2019 mooted an outright ban on all forms of private cryptocurrencies. It had suggested a fine of up to Rs 25 crore and imprisonment of as much as 10 years for anyone dealing in them.