The Reserve Bank of India Governor, said Wednesday that the central bank of India is engaged in constant dialogue with the government regarding cryptocurrencies.
“I can confirm that there is ongoing engagement between the government, the Reserve Bank and all other issues, including cryptocurrency. We have provided our views to government. Let’s wait to see the discussion paper,” Shaktikanta Das, chief of RBI, said. He was referring specifically to the consultation paper about cryptocurrencies that a finance ministry official revealed recently is quite ready.
While briefing a parliamentary panel about cryptocurrencies last month, RBI stated that accepting digital assets could partly lead to the dollarization the economy. This can be detrimental to the sovereign interests of the country. The central bank stated that it will severely compromise RBI’s ability regulate monetary policy as well as cash flow into the economy.
In the midst of strong opposition from the RBI to cryptocurrency, a senior Indian finance ministry official revealed recently that the government had prepared a consultation paper and would soon release it.
“The consultation paper has been prepared. We’ve done a thorough dive and consulted both domestic and multilateral stakeholders, as well as institutions such IMF and World Bank. We are hopeful that we will soon be able to submit and finalize it,” Ajay Sext, Economic Affairs Secretary, Ministry of Finance said on May 31.
Seth stated that the consultation paper would soon be made available to the public for comments and suggestions. The consultation paper gave rise to the impression that the government was working with crypto regulations. However, it might not be entirely in line with the RBI’s position on the sector.
RBI and Government on the Same Page
In a recent interview, the RBI chief cited the collapse of the crypto market and said that the government’s views were more or less in line with the central bank’s position.
“We have communicated our position to government and they will make a thoughtful call. The statements and utterances coming from the government seem more or less in line, I believe. “They are also equally concerned,” said the chief of RBI.
CBDC Plans in the Face of Regulatory Failure
In the current financial year, the RBI will launch its CBDC. T Rabi Sankar, RBI’s Deputy Governor, stated that CBDCs could end the case for cryptocurrencies including stablecoins, at a webinar hosted in part by IMF.
Experts believe digital versions of fiat currencies cannot function in an unregulated environment because some of them may also interact with cryptocurrencies.
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