Concerned over impact of cryptocurrency: Das
NEW DELHI: The Reserve Bank of India (RBI) is concerned over the impact cryptocurrencies may have on the financial stability in the economy and has conveyed the same to the government, governor Shaktikanta Das said on Wednesday.
“We have certain major concerns about cryptocurrencies. We have communicated them to the government. It is under consideration in the government and I do expect and I think sooner or later the government will take a call and if required Parliament also will consider and decide,” he said in an interview with CNBC-TV18.”I want to make it clear that the blockchain technology is different. Blockchain technology benefits have to be exploited, that is another thing. But on crypto we have major concerns from the financial stability angle and we have shared it with the government. The government will consider and take a call,” Das said.While Das did not elaborate further, the central bank had in the past expressed concerns on digital currencies being used for money laundering and terror funding.
The government is planning to introduce a bill in Parliament to bar companies and individuals from dealing in cryptocurrencies while creating a framework for an official digital currency.
The RBI had in 2018 banned banks and other regulated entities from supporting crypto transactions after digital currencies were used for frauds. The Supreme Court cut the curbs last year in response to a petition by cryptocurrency exchanges. Das said the RBI is “very much in the game” and is getting ready to launch its own digital currency.
“Central bank digital currency is work in progress. RBI team is working on it, technology side and procedural side, how it will be launched and rolled out,” Das added.
If this happens, the RBI will join other central banks including that of China, where it has electronic yuan.
While no date for the rollout has been set, the project is “receiving our full attention” and the central bank is “tying up several loose ends”, Das said.
On inflation targeting, the governor said the central bank’s internal working group will come out with its report on the target band in the next few days.
The Monetary Policy Framework, which mandates the Reserve Bank to maintain consumer price index or retail inflation at 4 per cent in a band of (+/-) 2 per cent, is coming up for review in March end.
“That (internal working group) report will be out very, very shortly, in the next few days. As far as flexible inflation targeting is concerned, this was a major structural reform undertaken by the government in 2016 and over the last 5 years the gains of this structural reform is visible,” he told CNBCTV18.