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RBI Does not Think Cryptocurrencies Are a Threat

January 04, 2019 17:29
Photo Credit: Hindustan Times
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As the date of the hearing draws to a close, it seems that the Reserve Bank of India (RBI) is on backfoot.

Last week, the central bank published a report titled ‘Report on Trend and Progress of Banking in India 2017-18’ in which it stated that cryptocurrencies were not a threat. It said, “The Financial Stability Board (FSB) has undertaken a review of the financial stability risks posed by the rapid growth of crypto-assets. Its initial assessment is that crypto-assets do not pose risks to global financial stability currently. The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become more widely used or interconnected with the core of the regulated financial system.”

It reiterated its earlier stance, that while cryptocurrencies in themselves are not dangerous, they do need a system of regulations. The report said, ” Crypto-currencies need constant monitoring on overall financial stability considerations, given the rapid expansion in their usage.”

Interestingly, in the past one week, this is the second time, the RBI has shown that it is willing to consider other options apart from imposing a blanket ban on cryptocurrency trading.

On the issue, as earlier reported by Crypto-News India, an anonymous source had reportedly said, “The government doesn’t want the digital currency any more. It thinks it is too early to even think about a digital currency.”

The RBI will soon be facing the Supreme Court and stakeholders of the cryptocurrency community on 15th of this month. Having said that, it is necessary to note that the Ministry of Finance has filed a counter affidavit pertaining to its stance on cryptocurrencies.

The government had filed it only after the hearing of case got adjourned to 15th of January 2019. The second thing lies within the affidavit itself – in the affidavit government has talked at lengths about the minutes of meetings in which crypto regulation was discussed, but it has not stated anything about the “expected time” within which it will come out with the regulation.

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