Indian Central Bank RBI Favors Full Crypto Ban, Says Partial Ban Won’t Work – Regulation

India's central bank, the Reserve Bank of India (RBI), has reportedly told the central board that it supports a complete ban on cryptocurrencies and said a partial ban will not work. The central bank reiterates that it has serious concerns about crypto. Meanwhile, the Indian government is reportedly making further changes to the crypto bill.

RBI wants blanket ban on crypto, says partial ban won't work

The Reserve Bank of India (RBI) held the 592nd Central Board meeting on Friday under the chairmanship of Governor Shaktikanta Das. The Central Board is the highest decision-making body of the apex bank.

The Board reviewed the current national and global economic situation, evolving challenges and mitigation measures. The directors also discussed various aspects related to cryptocurrency and central bank digital currency (CBDC).

The RBI reportedly said at the meeting that it was in favor of a complete ban on cryptocurrencies and noted that a partial ban would not work, the Economic Times reported, citing unnamed sources familiar with the deliberations.

Senior RBI officials highlighted several areas of crypto-related concerns, including transaction traceability, valuation, extreme price volatility, legal issues and identification of participants in transactions.

Governor Shaktikanta Das reiterated his anti-crypto stance and stressed that cryptocurrencies pose a serious threat to any financial system as they are not regulated by central banks.

This has repeatedly said that the Central Bank serious concerns regarding cryptocurrencies, stating that they pose a serious threat to India's macroeconomic and financial stability.

"There is a need for much deeper discussions (about crypto). When the central bank says it has much deeper concerns about macroeconomic and financial stability, there are far deeper problems associated with that," the central bank governor said in October.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 has been tabled for consideration in the winter session of Lok Sabha, the lower house of the Indian Parliament. The government is reportedly planning to regulate Crypto assets with the Securities and Exchange Board of India (SEBI) as the main regulator, but ban the use of crypto for payments. However, there are reports that the government is still revision the bill and will likely introduce it in the budget session instead.

The RBI is now also working on a digital rupee, which it wants to implement in phases. The central bank said last week that there will be two types of CBDC: wholesale and retail. "A lot of work has been done in the area of ​​CBDC on wholesale basis, while retail is a bit complicated and will take more time. We will release a pilot, whichever is ready first," said RBI Deputy Governor T. Rabi Sankar.

Do you think the RBI will convince the Indian government to ban cryptocurrencies completely? Let us know in the comments section below.

Kevin Helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the interface between economics and cryptography.

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