India’s central bank opposed the integration of cryptocurrencies into the financial system

According to the regulator, in its current form, such assets do not bring benefits to the economy

26.12.2023 - 13:10

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What’s new? The Central Bank of India said that it does not see the legalization of cryptocurrencies as a plus for the economy. Representatives of the regulator explained that digital assets in their current form offer limited benefits as regulated financial instruments and should not be integrated into the financial system.

Hindustan Times’ material

What else is known? Officials also compared cryptocurrencies to gambling because of their speculative nature high volatility, and as a result, high risks. Previously, the Central Bank has repeatedly stated that cryptocurrencies could threaten monetary sovereignty and monetary policy because of the potential for use in illegal activities, including money laundering and terrorist financing.

Officials are looking at national cryptocurrencies/central bank digital currencies (CBDCs) as a safe alternative, as such assets can ensure regulatory compliance and consumer protection. The digital rupee pilot project was launched as early as late last year.

Worldcoin stops offering the verification service in India, France, and Brazil

Earlier, the Kenyan authorities recommended suspending the project’s activities at the local level

In October, finance ministers and central bank governors of the G20 group of countries, chaired by India, adopted a roadmap for implementing crypto regulation to preserve macroeconomic and financial stability.

The plan, which officials called for implementation as soon as possible, involves closing data gaps, implementing framework laws, reaching out to non-G20 countries, and coordinating, cooperating, and sharing information globally.

At the same time, Indian authorities announced the launch of a blockchain data analysis system to combat crypto crimes, to which international law enforcement agencies, among others, will have access.

Despite the Central Bank’s negative attitude towards cryptocurrencies, the country topped the rating of analytical company Chainalysis in terms of the level of adoption of such assets. Thus, Indian citizens invest the largest share of their savings in cryptocurrencies.

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