Sunday, February 5, 2023

RBI Conveys Serious Cryptocurrency Concern To Central Government: Says Governor

Although the Reserve Bank of India clarified its stance on cryptocurrency, it still has some major concerns regarding the digital asset, which it has already conveyed to the central government.

The RBI governor Shaktikanta Das recently released a public statement, stating, “There is no change in RBI’s position (regarding cryptocurrencies). And, with regards to RBI’s position, we have major concerns about cryptocurrencies, which we have conveyed to the government. And, with regard to investors, it is for each investor to do his own due diligence and take a very careful and prudent call.”

Following the RBI’s clarified stance on cryptocurrency, the governor said that although the banks are not allowed to cite RBI’s 2018 circular, they would also have to comply with some exclusive local rules. 

A few weeks ago, many private banks sent a mail to some of their customers cautioning them about dealing in cryptocurrencies.

On April 06, 2018, the Central Bank of India released a circular that restricted the banks from dealing in any crypto-related activities. Later, the circular was challenged in the Supreme Court of India and then in March 2020, the apex court revoked the blanket ban imposed by the RBI.

Recently, the RBI governor has said that after the Supreme Court quashed the RBI’s 2018 circular, the central bank kept it aside. However, it came as a surprise to them, when they came to know that many of the private and public banks are still referring to that circular for not offering their services in crypto-related activities. 

As soon as RBI made its clarification public, HDFC bank retracted its earlier communication to its customers, due to which they were unable to deal in cryptocurrencies.

Meanwhile, the central government has remained silent on cryptocurrency-related matters. Earlier, it appeared that government would bring some laws to impose a ban on crypto trading in India. But later a report published stated that the central government of the country would be introducing a new panel to decide crypto regulation.

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