The head of the Indian central bank yesterday said he is concerned that cryptocurrencies might affect financial stability in Asia’s third-largest economy, a view that could shape regulations on the asset that is breaking price records around the world.
The monetary authority has conveyed these “major concerns” to the Indian government, Reserve Bank of India Governor Shaktikanta Das said in an interview with CNBC TV-18.
Indian Prime Minister Narendra Modi’s administration is proposing to prohibit all private cryptocurrencies in the country and create a framework for an official digital currency.
Photo: Francis Mascarenhas, Reuters
While Das did not elaborate, the bank has expressed concerns on digital currencies related to issues ranging from money laundering to funding terrorists.
The central bank had banned banks and other regulated entities from supporting cryptocurrency transactions in 2018 after digital currencies were used for fraud following Modi’s landmark demonetization program that replaced India’s cash with new bills.
The Indian Supreme Court cut the curbs last year in response to a petition by cryptocurrency exchanges.
The central bank is “very much in the game” in getting ready to launch its own digital currency, Das said, joining other central banks, including China’s electronic yuan.
While there was no set date for roll out, the project is “receiving our full attention,” while the Reserve Bank of India is working on the technology and procedural aspects, and is tying up several loose ends, Das added.
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