Indian regulators plan to ban private cryptocurrencies in the country: Experts criticize the decision

Indian Regulators Firm on Ban of Private Cryptocurrencies

Indian regulators led by the Reserve Bank of India (RBI) have decided to take steps to ban private cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH). This decision stems from the growing interest in the central bank digital currency (CBDC) as an alternative, aiming to bring greater security and efficiency to the financial sector.

Arguments of Indian Banks

Indian banks argue that CBDC could be a safer option than private cryptocurrencies and could positively impact the promotion of financial inclusion in the country. They also point out the necessity of creating appropriate regulations that would enable the introduction of the central digital currency as the primary means of payment in India.

Consultations on Digital Currency Regulations

Currently, Indian regulators, including the RBI, are consulting with the government to develop a regulatory framework for digital currencies in the country. There is a broad consensus in favor of banning private cryptocurrencies in favor of promoting CBDC as the primary form of payment.

Criticism of Comparing CBDC to Bitcoin and Ethereum

It should be noted, however, that in India, there is also criticism of comparing the central digital currency to private cryptocurrencies such as Bitcoin or Ethereum. There is a group of industry leaders who believe that both types of assets serve different functions and should complement each other rather than compete.

Despite the criticism, the decision to ban private cryptocurrencies requires further consultations, but the government has the ability to introduce stricter regulations or even a complete ban.

India and G20 on Cryptocurrency Regulations

It is worth noting that India, along with the G20 group, supports a joint synthesis of the International Monetary Fund (IMF) and the Financial Stability Board (FSB), encouraging global cooperation in regulating the cryptocurrency market. This is aimed at creating coherent legal frameworks for the functioning of the industry on an international scale.

Utilization of Blockchain Technology in India

The Indian government recognizes the potential of blockchain technology and announces its utilization in various socially beneficial projects. At the same time, regulators focus on developing the central digital currency, testing its potential in pilot programs, and tightening control over digital assets in the country.

RBI’s Planned Actions regarding CBDC

The Reserve Bank of India believes that the digital rupee, as a form of central digital currency, has tremendous potential both in domestic and international transactions. Further expansions in CBDC applications are planned to enhance the benefits of digital money technology in the Indian financial system.

Indian regulators are not only focused on creating legal frameworks for CBDC but also on combating tax evasion and regulatory loopholes in the cryptocurrency market. This is an important step aimed at ensuring the security and transparency of the functioning of the financial system in India.